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Nio Hits BofA's Recently Revised Price Target In June Rally

Shanthi Rexaline

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. 

Related Links:

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

Date Firm Action From To
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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