US Tiger Securities maintained a Buy rating and $8 price target on Nio, saying the Chinese EV maker is entering a stronger product cycle that should drive improved profitability despite near-term delivery headwinds.
Analyst Bo Pei said Nio reported a solid third-quarter performance highlighted by meaningful margin recovery and improving operating efficiency across its three-brand portfolio, with the company on track to benefit from multiple large SUV launches in 2026.
“While the 4Q delivery guidance of 120-125k units came in below prior market expectations, management noted continued strength in high-margin models, a more favorable product mix heading into year-end, and reiterated confidence in achieving quarterly breakeven in 4Q,” Pei wrote in a research note.
Based on Tuesday’s closing price of $5.50, US Tiger’s $8 target implies an upside potential of 45.5%, making it one of the more bullish outlooks on Wall Street.
Margin Expansion
Vehicle gross margin improved to 14.7% in the third quarter while gross margin from other sales reached 7.8%, resulting in an overall gross margin of 13.9%, the highest in nearly three years.
“Looking ahead, the 2026 outlook appears constructive as the company enters a stronger product cycle led by multiple large SUVs, improving cost structure, and scale-driven operating leverage,” Pei said.
Founder and Chief Executive Officer William Li said the ES8 and L90, combined with three new large SUVs planned for 2026, should help the company achieve vehicle margins of around 20%.
“Overall, despite near-term volume volatility tied to subsidy changes, we view the underlying fundamentals as improving,” Pei wrote.
“Strength in high-end models, rapid margin normalization, disciplined cost execution, and a stronger 2026 product cycle all point to a more favorable profitability path,” the analyst added.
Pei said the Shanghai-headquartered manufacturer “appears well positioned to enter its next phase of growth.”
“With a strengthened balance sheet and a clearer roadmap toward sustainable earnings, Nio appears well positioned to enter its next phase of growth,” the analyst wrote. “Maintain BUY.”
Stock Performance
Nio‘s US-listed shares closed 4.35% lower at $5.50 on Tuesday following the earnings report released before the market opened.
As of press time, the stock was trading 0.3% higher at $5.52.
Wall Street Reactions
As reported earlier this Wednesday, Macquarie downgraded Nio to Neutral from Outperform and cut its price target to $5.30 from $6.70, turning bearish on the stock.
Bank of America cut its price target to $6.70 from $7.60 while maintaining a Neutral rating, saying the stock has already priced in improving margins.
Morgan Stanley maintained its bullish outlook, with analyst Tim Hsiao citing narrowing losses and widening margins.
