Nomura upgraded NIO (NIO) after taking in the Chinese electric vehicle maker’s earnings report. The firm pointed to an encouraging outlook and thinks the current business momentum will continue.
Analysts Joel Ying and Ethan Zhang saw clear improvement in the company’s financial performance and shipment momentum over the past two quarters, suggesting NIO (NIO) is finally moving into a healthier business cycle. Notably, Nomura expects NIO (NIO) to nearly double shipment growth year over year in Q1 to support a solid start to the year.
Looking ahead, improved operating efficiency and tighter cost control are seen as key drivers of an improved profitability profile. The analyst team also emphasized that three new mid- to large-size SUVs should support further shipment expansion and margin gains.
Nomura’s lowered price target of $6.60 represents 18% upside potential for the EV stock.
For Q4, NIO (NIO) delivered strong top-line growth, with total revenue reaching roughly RMB87.5B for the quarter, supported by higher deliveries and a richer mix of newer models. Vehicle sales were up 65% quarter-over-quarter and were 81% higher than a year ago. Gross profit improved to about RMB11.9B, and gross margin expanded meaningfully versus the prior year, reflecting better vehicle margins and cost-down initiative
Shares of NIO (NIO) fell back 2.2% in premarket trading on Wednesday.