Bernstein raised the price target on the Chinese EV maker Nio after the company reported “mixed” second-quarter results that still don’t convince the firm about the fourth quarter profitability target.
The firm’s analyst Eunice Lee lifted the price target on Nio to $5.50 from $4.00 while maintaining a ‘Market Perform’ rating in a note published Wednesday.
Despite the increase, Bernstein’s new target is 16% below the previous closing price of Nio’s U.S.-listed shares, which closed at $6.58 on Tuesday.
“Yet to be convinced on profit breakeven; Q2 results were mixed—missed on ASP [average selling price] and vehicle margin, but Opex [operating expenses] cuts came in ahead of expectations,” Lee wrote.
Nio posted the best net loss since late 2023 as cost cutting measures continue and a revenue of 19.0 billion yuan ($2.6 billion), up 9% year-on-year and 58% from the previous quarter.
Deliveries climbed to 72,000 units in the second quarter, rising 26% from a year earlier and 71% sequentially, with the company expecting to more than double from Q2 to Q4, reaching 150,000 units across the three brands.
ASP “declined further to RMB 224k (-18% yoy and -5% qoq),” Lee said, pointing to the ramp-up of the lower-priced Firefly model, which made up 11% of sales, and increased discounts on other vehicles including the ET5, ET5 Touring and ES6/EC6.
Gross margin was “weak at 10.0%, with vehicle margin flat at 10.3%, vs. 10.2% in Q1 25, despite improved scale,” Lee wrote.
Operating expenses totaled 6.8 billion yuan, or 36.7% of revenue, with R&D cut to 3 billion yuan (16% of revenue) and SG&A at 4 billion yuan (21%).
Net loss narrowed to 5 billion yuan, improving from 6.8 billion yuan in the first quarter but similar to the same period last year, Lee noted.
“Overall, cost controls were effective, but margin pressure from lower ASP and discounts persisted,” the analyst wrote.
Bernstein’s cautious stance came as BofA, Mizuho, Macquarie Tiger Securities increased their price target on Nio.
Bank of America raised its target to $7.10 from $5.00 on Wednesday, maintaining a Neutral rating while increasing sales and margin estimates through 2027.
Mizuho, Tiger Securities and Macquarie also increased their targets earlier this week, citing stronger sales momentum and a robust product pipeline.
As of press time, Nio’s US-listed shares are falling 4.3% on Thursday’s pre-market trading to $6.04.
