Written by Cláudio Afonso | LinkedIn | X
Jefferies analyst Xiaoyi Lei released Friday a new research note lowering the firm’s price target on the electric vehicle manufacturer Nio.
Following the earnings results from the second quarter, the analyst maintained a Hold Rating on the stock while reducing the target price by 40 cents to $5.10. Based on Friday’s closing price of $5.02 per share, the new target indicates a modest upside potential of 1.6 per cent.
Xiaoyi Lei noted that Nio’s outlook for vehicle deliveries in the third quarter “came in line” with Jefferies’ expectations.
“Nio reported 2Q24 results with revenue up 98.9 per cent YoY [year over year] to RMB 17.4 billion and net loss narrowed by 2.5 per cent QoQ [quarter over quarter] to c.RMB 5.1 billion (vs. our est. net loss of RMB 4.5 billion). 2Q24 vehicle margin was on par with management. Guidance at 12.2 per cent. 3Q24 delivery target of 61k-63k units came in line,” Jefferies analyst wrote.
“Moreover, Nio sees overall vehicle margin to reach 15% in 4Q24, and aims for a GPM [Gross Profit Margin] of 25% for [the] Nio brand longer term,” Lei added.
The analyst expects that Nio’s investments in its sub-brand Onvo can “cloud” its profit outlook in the second half of the year as it will increase the investment in battery charging and swapping infrastructure.
In 2024 — and so far — the Shanghai-based EV maker has slowed down the deployment of new stations in China after opening one thousand new stations in 2023.
“While better operating leverage can be expected with L60 starting mass deliveries, sales channel expansion, combined with construction of battery swap stations, could still cloud Nio’s profit outlook in 2H,” Lei said.
“We fine-tuned 2024/25E EPS to RMB -10.2/-5.4. Maintain Hold with PTs [price targets] of $5.1 for Nio-US and HKD37.5 for Nio-H[ong Kong shares],” the analyst wrote concluding the note.
Written by Cláudio Afonso | LinkedIn | X
