UPDATE: NIO (NIO) PT Lowered to $40 at US Tiger Securities

March 25, 2022 9:03 AM EDT
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Price: $20.22 -3.25%

Rating Summary:
    21 Buy, 4 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 53 | New: 12
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(Updated - March 25, 2022 10:36 AM EDT)

US Tiger Securities analyst Bo Pei lowered the price target on NIO (NYSE: NIO) to $40.00 (from $45.00) while maintaining a Buy rating.

The analyst comments "We are maintaining our BUY rating and decreasing PT to $40 (was $45) after NIO reported mixed 4Q:21 results, with revenue ahead but higher costs. With 4Q deliveries (25,034) preannounced, investors primarily focused on 4Q margin,1Q guidance and '22 outlook. Vehicle margin further improved to 20.9% in 4Q, up 290bps q/q and 370bps y/y, mainly driven by higher unit price and the new 75Kwh hybrid-cell battery packs. The company guided 1Q deliveries to 25,000 – 26,000, 5% below our estimate, primarily on supply chain constraints and new COVID-19 cases causing delivery issues. NIO will start delivering three new models in 2022, including ET7 (late March), ET5 (September), and ES7 (3Q), all based on the new NT2 platform. With F1 expansion expected to complete in midyear, and F2 production expected to start in 3Q, production capability will increase meaningfully this year. New models and higher production capacity should drive step function volume growth throughout 2022. Mgmt. also expresses the dedication to keep investing in '22 and '23, considering them strategically important. Therefore, NIO expects to break even in 4Q:23 and achieve profitability in 2024. Overall, while the costs outlook is higher than expected for '22 and '23, we do believe these investments are necessary and should solidify NIO's advantages on many fronts. Valuation also seems very attractive at 2.1x '23E sales, a roughly 80% discount to TSLA."

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