Nio Stock Rallies On Buy Rating From UBS: Analyst Expresses Confidence In EV Maker’s New Products

UBS on Tuesday upgraded Nio (NIO) to ‘Buy’ from ‘Neutral’, citing confidence in the company’s new vehicle offerings.

The brokerage also raised the price target on Nio to $8.50 from $6.20, according to TheFly. The new price target represents an upside of nearly 31% from the stock’s closing price on Monday.

NYSE-listed shares of the Chinese EV maker jumped nearly 2% in the pre-market session at the time of writing. On Stocktwits, retail sentiment around NIO stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume rose from ‘low’ to ‘normal’ levels.

According to UBS, the company’s newest products could further attract customers after the $1 billion equity offering last week bolstered visibility on Nio’s healthy operations. The firm expects Nio to achieve free cash flow breakeven in 2026.

Last week, the company said that it intends to use the net proceeds from the $1 billion equity offering to invest in the research and development of core technologies for smart electric vehicles, develop future technology platforms and vehicle models across its brands. It also intends to utilize the funds to expand its battery swapping and charging network, further strengthen its balance sheet, and for general corporate purposes.

Earlier this month, Nio reported total revenues of RMB19.01 billion ($2.66 billion) for the second quarter (Q2), which was below an analyst estimate of RMB19.74 billion, according to data from Fiscal AI. The net loss for the quarter was RMB4.99 billion, representing a 1% decrease from the second quarter of 2024.

For the third quarter, the company expects to deliver between 87,000 and 91,000 vehicles, representing an increase of approximately 40.7% to 47.1% compared to the same quarter in 2024. The higher delivery expectations are spurred by the company’s new vehicle models, including the Onvo L90 and the new Nio ES8. CEO William Li noted in a post-earnings call that with the new vehicles, the company sees a market demand that is higher than what it expected before launch. While the L90 was officially launched on July 31, the ES8 was formally unveiled last month and made available for pre-orders, with deliveries expected to begin on September 20.

Li said on Monday that the company’s Heifei factory is ramping up shipments heading to the launch of the new ES8.

NIO stock has risen 49% this year and approximately 20% over the past 12 months.

Read also: US Regulator Opens Probe Into 174,000-Plus Tesla Model Y Vehicles – Check Out Why

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