Morgan Stanley updated its model on electric vehicle maker Nio on Wednesday, trimming its 2025 sales estimates but reducing projected operating expenses and net losses to reflect the company’s restructuring plan.
In a new research note obtained by PriceTarget, analyst Tim Hsiao raised the base-case scenario value by 10% to $6.60, while the bull- and bear-case scenario values were lifted 11% to $10.70 and $2.10, respectively.
The firm reaffirmed its Overweight rating on Nio shares.
In mid-July, Hsiao had reiterated a $5.90 price target, citing “solid preorder intake” for Onvo’s six-seat model, the L90.
At that time, Morgan Stanley highlighted that the vehicle had secured between 30,000 and 35,000 pre-orders within four days of its pre-launch event.
“We mark-to-market and reduce our 2025 volume estimate by 9% to 330,000 units to reflect a weaker-than-expected 1H25,” Hsiao wrote, adding that the 2026 and 2027 volume forecasts “are largely unchanged” at 470,000 and 586,000 units.
For 2025 to 2026, Morgan Stanley projects a 42% year-on-year increase in vehicle sales, supported by what Hsiao described as “the solid order intake of Onvo L90 to underpin more meaningful volume recovery.”
From 2026 to 2027, sales growth is estimated at nearly 25%.
Gross margin estimates for 2025 remain “largely unchanged,” while projections for 2026 and 2027 were raised by 0.2 percentage points to reflect product mix shifts.
Citing the company’s ongoing restructuring and headcount reduction, Morgan Stanley lowered its 2025 operating expenses estimate by 10%.
“Our net loss estimates narrow by 8%, 13% and 9% in 2025-27, respectively, while our net loss per share changes similarly,” Hsiao wrote.
The firm lifted its 12-month price target to $6.50 — from the previous $5.90 which was reaffirmed last month.
Based on the current stock price, the new target implies an upside potential of 28%.
“Consequently, our base-case scenario value rises 10% to US$6.60, while our bull- and bear-case scenario values rise 11% to $10.70 and $2.10, respectively. Our WACC and terminal growth assumptions are unchanged,” the analyst wrote.
“Using our probability-weighted DCF valuation methodology (weightings are unchanged), our price target is up 10% to US$6.50,” Hsiao added.
Nio separately said on Wednesday that it will report second-quarter earnings results on September 2, before US markets open.
Founder and chief executive William Li and chief financial officer Stanley Qu are scheduled to host the earnings call at 8:00 a.m. Eastern Time.
Meanwhile, Nio will host the pre-launch event of its revamped ES8 SUV in Hangzhou on Thursday.
Showroom units have already been shipped to its stores across China. The official launch is slated for the company’s annual event in late September.
