Deutsche Bank reiterates BUY rating and $70 price target on NIO after Annual Deliveries Numbers

Deutsche Bank analyst Edison Yu reiterated NIO‘s Buy Rating and $70 Price Target – a +100% upside from the last closing price.

In a released note, Yu said they expect “NIO’s marquee product development efforts to become a reality in 2022, which should help the stock recover”.

NIO hit a new all-time-high one year ago at $66.99 and it’s been recovering from the 52 Week Low of $27.52 by December 29th.

The main catalysts appointed by Deutsche Bank were:

“ET7 deliveries begin on 3/28; Unveil new 6th model (“ES7” SUV) in late 2Q or early 3Q; New NAD features roll out starting mid-year; ET5 deliveries begin in September; ET7 available in Germany in September ; ES7 SUV deliveries begin in 4Q ; Hybrid solid state battery available in 4Q; Mass market brand update before year-end”

Yu’s team expects that the ES7 could be priced higher than the RMB 358,000 starting price of NIO’s current top-selling SUV, the ES6, and potentially around RMB 400,000.

The team expects that the official unveil event for the NIO ES7 will likely take place in late second quarter or early third quarter, with deliveries likely to begin in the fourth quarter, shortly after the ET5.

The reason for this delay is to avoid causing a drop-off in existing SUV model sales, mainly the ES6, but we feel this is strategically the right move considering how competitive the mid-size SUV segment is becoming and eventually see this as a tailwind for 2023 volume estimates.
To mitigate cannibalization of existing sales, we expect NIO to conduct a hardware upgrade for existing vehicles (infotainment) and also increase incentives such as subsidizing the interest payments and/or discounting NIO PILOT.
Edison Yu, Deutsche Bank Analyst

NIO has been receiving many Price Target Updates after the NIO Day and, more recently, the Deliveries Numbers from December and the Global ones from 2021. Credit Suisse released a note where it maintained the Outperfom Rating and the $83 Price Target for NIO plus the first leaked photos of the new SUV Model ES7.

The company reached yesterday the 200 delivered Vehicles in Norway, the first European country NIO is selling towards the expansion to another 5 countries this year.

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