Mizuho analyst Vijay Rakesh raised the firm’s rating and price target on Nio, citing improving demand trends and narrowing losses despite margin pressures as the company ramps its lower-priced brands.
In June, when the EV maker reported its first quarter earnings results, Mizuho had cut its price target to $3.50 from $4.00.
The new upgrade followed Nio’s second-quarter results, where the Shanghai-based EV maker posted revenue of 19.0 billion yuan ($2.65 billion), up 9% year-on-year but below consensus of 20.0 billion yuan.
Nio shares closed 3.1% higher on Tuesday at $6.58 indicating that Mizuho’s price target represents a downside of 8.8% based on the latest closing price.
In a new research note, Rakesh said the company reported “a modestly softer” second quarter revenue and EPS of 19.0 billion yuan/(1.85) yuan, compared to the Wall Street consensus of 20.0 billion yuan and (2.20) yuan.
Mizuho’s analyst added that the EV maker guided third quarter revenue “softer” to 22.3 billion yuan versus the consensus of 24.1 billion yuan and deliveries to 89,000 units — versus consensus of 91,100.
The analyst noted that the third quarter delivery guidance of between 87,000 and 91,000 vehicles “implies up 47% q/q with new Lower ASP [average selling prices] Firefly/Onvo L90 ramps” as sales of the premium core brand Nio fall and cheaper sub-brands Onvo and Firefly gain share.
Vehicle sales reached 16.1 billion yuan ($2.25 billion), an increase of 2.9% from the same period a year earlier.
Nio reported a net loss of 5.0 billion yuan ($697 million), the lowest since late 2023 and narrower than the 6.7 billion yuan loss in the first quarter.
Both sub-brands reached a new sales record in August while Nio brand deliveries fell nearly 48% year over year and 17% sequentially.
Nio founder and CEO William Li previously said in June that the target was to reach 25,000 monthly deliveries each for Nio and Onvo in the fourth quarter, totaling 150,000 units excluding Firefly.
On Tuesday, Li reiterated the target but said it now includes the Firefly brand as well.
Rakesh said the fourth quarter delivery target “remains challenging.”
“N-T better EV demand (ES8) with lower ASP models helping, but expectation for 4Q25E exiting at ~50k deliveries/month, potentially targeting 120-150k+ deliveries remain challenging given with Sep at ~37k/month,” he wrote.
The analyst raised the rating from Neutral to Outperform and the price target to $6 from $3.50.
“We see Nio fairly valued at 0.8x C26E P/S, ~in-line with peers ~0.9x given better EV deliveries but margin headwinds as models ramp,” Rakesh wrote.
Nio’s third-generation ES8, the company’s first production model, is scheduled for official release later this month at its annual event.
Onvo, meanwhile, will only begin deliveries of the L80 next year as it focuses on ramping the L90 and L60 — the management reaffirmed on Tuesday’s conference call.
Looking to 2026, Nio plans to launch two new SUVs: the flagship ES9 and a new version of its five-seat ES7.
