Written by Cláudio Afonso | LinkedIn | X
Swiss Bank UBS released a new research note late Monday lowering the firm’s price target on the shares of the EV manufacturer Nio from $7.20 to $5.20.
The bank maintains a “neutral” rating on the stock as it sees the record second-quarter deliveries of 57,373 vehicles having limited impact on reducing losses.
In the new research note, published on Monday, the bank forecasts a second-quarter loss of approximately 4.9 billion yuan ($673.5 million), marking a 6% decline from the first quarter of the year and a 20% year-over-year decrease. The EV maker is expected to report the financial results from the second quarter in August.
UBS’s revised target price of $5.2 represents an upside potential of approximately 11% based on Nio’s closing price of $4.69 on Monday.
The bank lowered Nio’s valuation basis from 1.4 times its forecast price-to-sales ratio for next year to 1 time. This recalibration reflects a broader shift in investor sentiment, focusing more on returns rather than growth, coupled with the anticipated 20% equity dilution effect stemming from Nio’s recent $2.2 billion investment from Abu Dhabi’s CYVN.
Regarding the upcoming launch of the first model from Nio’s subbrand Onvo, which is expected to start deliveries on September 10, UBS expects a neutral reaction from the capital markets.
In April 2021, when NIO’s stock was above $39, UBS set a price target of $55.00. Since then, as NIO’s stock price declined from nearly $40 to about $4, UBS has been gradually reducing its price target.
| Date | Stock Price | UBS Price Target ($) | Rating |
|---|---|---|---|
| 2021-04-22 | $39.57 | 55.00 | Neutral |
| 2021-08-12 | $42.47 | 50.00 | Neutral |
| 2021-11-10 | $39.55 | 46.00 | Neutral |
| 2022-04-04 | $23.85 | 32.00 | Buy |
| 2022-11-17 | $10.67 | 13.00 | Neutral |
| 2023-07-31 | $15.30 | 15.00 | Neutral |
| 2023-11-01 | $7.45 | 8.00 | Neutral |
| 2024-03-13 | $5.92 | 7.20 | Neutral |
| 2024-07-22 | $4.69 | 5.20 | Neutral |
The bank dropped its target price to $13.00 by November 2022 when the stock was at $10.67, and then to $7.20 by March 2024 with the stock at $5.92.
The latest reduction to $5.20 continues this trend, maintaining a “neutral” rating as Nio’s stock closed at $4.69 on Monday. The shares of the EV maker are trading 2.13% percent lower on early Tuesday following the news.
Next Saturday, July 27, Nio will host the second edition of its annual tech-focused event, NioIN, in Shanghai. In a post on Weibo, Nio’s Vice President of Automotive Technology, Bai Jian, confirmed that the new generation of the Nio Phone will be officially unveiled at the event.
Last Friday, the company released a new ‘Mars Red’ color for its lineup in China. The announcement was made via the Nio app, accompanied by a photoshoot of the four models standing in front of the company’s biggest showroom — officially named “Nio House” — in the city of Hefei.
This color will be available for Nio’s best-selling models including the ET5, the ET5 Touring, the EC6 Coupe SUV, and the ES6 SUV.
Written by Cláudio Afonso | LinkedIn | X
