Why NIO Stock is down today
Shares of Chinese electric vehicle (EV) maker NIO (NYSE: NIO) were trading lower on Tuesday amid a large sell-off in EV shares, and despite strong selling results and an upgrade from a longtime Wall Street skeptic.
As of 10:30 a.m. EST today, US stocks in NIO’s custodian were down about 6.4% from Monday’s closing price.
NIO was just one of the EV stock groups that traded lower on Tuesday. Most of them have seen strong bull runs in recent months; retirement is no surprise and, at least for now, probably shouldn’t be of concern in the long run auto investors.
But in the absence of this sector pressure, NIO stock could otherwise be up on two good news items. First, he announced his November deliveries ahead of the US markets open on Tuesday, and they were solid: 5,291 vehicles delivered in November, a new monthly record and a sign that demand for the company’s premium electric SUVs continued to be strong following its impressive third quarter.
NIO’s recent results have convinced a longtime Wall Street skeptic. In a new note Tuesday morning, Goldman Sachs Analyst Fei Fang put NIO at a neutral level with a price target of $ 59, saying that NIO’s success in increasing the range of its vehicles, its battery program as a service, and the positive effects of the Chinese government’s redesign of incentives appear likely to keep its sales growing for some time.
An upgrade to neutrality may not sound like much, but Fang previously valued NIO’s stock as a sell, with a price target of just $ 7.70. It’s a big change for Goldman.
NIO also said it was trying to speed up an increase in production capacity that it planned to implement in early 2021.
This increase in capacity will allow NIO to produce approximately 7,500 vehicles per month. The company last upgraded its production line in September, increasing its monthly output from around 4,000 to around 5,000, but demand is already exceeding that increase.
CEO William Bin Li said during call for earnings last month he hoped the increase would be in place by the end of January; NIO said today that it is now aiming for its production line and suppliers to reach that speed before the end of December.
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