Buy Nio (NIO) Stock as it is Getting Ready to Rally Into Year End and 2022 - Deutsche Bank

Deutsche Bank analyst Edison Yu added Nio (NYSE: NIO) stock to the firm’s short-term Buy Idea list.

Yu believes Nio stock is getting ready to catch up with its rival into-year end, as well as in the next year. Nio stock is down 7% since early August, notes Yu, while all other major rivals including Xpeng (NYSE: XPEV), Tesla (NASDAQ: TSLA), and BYD (OTC: BYDDF) are up.

“We attribute this mainly to NIO's struggles with the chip shortage and lack of new products,” Yu said in a client note.

On the fundamental side, the analyst sees several catalysts in the near term that should help drive the rally.

1) 3Q21 earnings on 11/9: management will provide 4Q guidance that shows large step-up in volume recovery for Nov/Dec and while official consensus is likely too high, we believe buy-side expectations have already been reset.

2) November monthly deliveries: likely reported on 12/1 and should confirm robust demand for existing models despite greater competition.

3) NIO Day: will be held on 12/18 and we expect new models/technology to be unveiled that should boost both investor and consumer sentiment.

Moreover, Yu expects Nio to experience “material volume recovery in the next 2 months following very soft performance in October due to extended factory downtime.”

Nio stock price is up 2.5% in pre-open Thursday, while being down 22% YTD.

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