Bank of America cut its price target on Nio on Tuesday, saying the stock of the Chinese electric vehicle maker has already priced in the improving margins reported for the third quarter.
Analyst Ming Hsun Lee lowered the target to $6.70 from $7.60 while maintaining a Neutral rating on the stock.
The reduction follows Nio‘s announcement that it expects to deliver between 120,000 and 125,000 vehicles in the fourth quarter, down from a previous target of 150,000 units across its Nio, Onvo and Firefly brands.
“We adjust our 2025/26E sales volume by -5.5%/+0.4% to reflect the new sales guidance and model pipeline,” Lee wrote in a research note.
The midpoint of the guidance at 122,500 vehicles represents an 18.3% reduction from the earlier target.
The revised outlook indicates Nio will deliver fewer than 326,221 vehicles for the full year, falling short of management’s ambition announced late last year to double deliveries in 2025, which would have meant more than 440,000 units.
Vehicle margins continued to improve in the third quarter, reaching 14.7% compared with 13.1% a year earlier and 10.3% in the second quarter.
The improvement was driven by cost control measures and sales of higher-margin models including the Onvo L90, which began deliveries in August.
The Nio ES8, currently the Group’s best-selling model, had minimal impact on third-quarter results as nationwide deliveries only began in the final days of September.
“Factoring in the 3Q25 results and better margins, we narrow the non-GAAP net loss by 11/18% for 2025/26E,” Lee wrote.
“We reiterate our Neutral rating, as despite the strong model pipeline, in our view, the positives from volume growth and a narrowing loss are already reflected in the current valuation,” the analyst added.
Bank of America had raised its price target in late September to $7.60 from $7.10, days after Nio closed a $1.16 billion equity offering.
The company’s US-listed shares closed 4.35% lower at $5.50 on Tuesday.
The stock has risen nearly 26% year to date after reaching a five-year low of $3.02 in July, then rebounding to just above $8 in early October.
Despite the reduced sales guidance, Nio founder and Chief Executive Officer William Li said the company remains on track to post its first profitable quarter in the fourth quarter.
As reported by the local media outlet CnEVPost, China’s CMB International said in a new research note on Wednesday that the EV maker will miss the profitability target.
CMB expects Nio to report a net loss of 1.6 billion yuan ($226 million) in the final quarter of the year and a non-GAAP adjusted net loss of 700 million yuan.
Morgan Stanley has also reacted to Nio‘s third quarter earnings results.
The firm maintained its bullish outlook on the company on Tuesday, with analyst Tim Hsiao citing narrowing losses and widening margins in the third quarter.
