Nio's Guidance Cut Might Dampen Stock Performance, Analyst Says - NIO (NYSE:NIO)

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  • Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating on the shares of Nio Inc NIO with a price target of $16.10.
  • The electric vehicle maker lowered its Q4 FY22 guidance to 38,500 – 39,500 vehicles from the previous outlook of 43,000 – 48,000 vehicles.
  • The analyst said that the guidance cut mainly reflected COVID-led disruptions in deliveries/production and lingering supply constraints caused by rising COVID cases in major cities.
  • In the analyst’s view, a guidance cut might dampen NIO’s stock performance but shouldn’t trigger a sharp sell-off.
  • Hsiao said that the fallout from China’s reopening should be sector-wide and likely transitional.
  • The analyst expects the market to refocus on the pace of resurgence in-store traffic/order intake in the coming months.
  • The analyst factors solid volume growth over time and expects net profit to break even in 2024.
  • XPeng Inc XPEV and Li Auto Inc LI should also feel the heat, but the analyst sees relatively less downside to their more updated Q4 delivery targets of 20,000 – 21,000 and 45,000 – 48,000 units, respectively.
  • Also ReadTesla Production Reports Lead To Carnage For Chinese EV Stocks As Hang Seng Tech Majors Hold It Together
  • Price Action: NIO shares are trading lower by 3.48% at $9.71 on the last check Wednesday.
  • Photo Via Company

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Image and article originally from www.benzinga.com. Read the original article here.