Shares of Chinese electric vehicle manufacturer Nio Inc – ADR (NYSE: NIO) have been on a roll since the start of June, with year-to-date gains of about 70%.
Industry, Company Fundamentals Improve: Nio's strong gains are predicated on improving fundamentals at the company, with order growth and cost discipline propping up the top- and bottom-line.
In late May, the company reported better-than-expected bottom-line performance despite a top-line miss, with revenue impacted primarily by the COVID-19 pandemic.
The company has picked up since then. After bottoming in February, orders have started to rebound. Nio is now projecting record deliveries of 9,500-10,000 vehicles in the second quarter.
Industry fundamentals have also bottomed. The Chinese EV market is slowly and steadily improving in the wake of the coronavirus — and the softness induced by the government's cutback in EV subsidies.
Stellar Stock Gains: From $3.98 at the end of May, Nio gained about 72% through Monday. On June 2, the stock added about 20% following a Goldman Sachs upgrade from Neutral to Buy with a $6.40 price target.
With the company reporting strong order growth for May, the stock continued to head higher and breached the $6 level.
Although an equity offering announced June 10 led to a pullback in shares, the stock has resumed its uptrend.
On Monday, the stock jumped about 12% before settling at $6.83.
The stock opened Tuesday's session at $7.43, above BofA Securities' recently revised price target of $7.30 and rose to a high of $7.44 amid the news it has closed its 72-million-ADS offering at $5.95 per share, raising $428.4 million.
The stock has pulled back since then and was last seen down 1.68% to $6.72.
Nio's History Of Capital Raises: A Look At The Chinese EV Manufacturer's Debt
Nio Analyst Projects Upside On Stronger Orders, Improving Margins, Cash Flow
Photo courtesy of Nio.
Latest Ratings for NIO
|Jun 2020||Goldman Sachs||Upgrades||Neutral||Buy|
|May 2020||JP Morgan||Upgrades||Underweight||Neutral|
|Mar 2020||JP Morgan||Assumes||Underweight|
View More Analyst Ratings for NIO
View the Latest Analyst Ratings
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