Nio Accelerates On Analyst Upgrade, China Stimulus Hopes: Retail Upbeat On EV Stock’s Outlook

Chinese electric-vehicle maker Nio, Inc.’s ($NIO) shares took off on Monday and traded sharply higher by the mid-session.

The sharp spike comes after Macquarie analyst Eugene Hsiao upgraded Nio from ‘Neutral’ to ‘Outperform’ but the price target was downwardly adjusted from $8.20 to $6.60, according to Investing.com. 

The analyst said he was optimistic about the Shanghai-based EV startup issuing upbeat guidance when it releases its third-quarter results.

Hsiao also expects EV volume to accelerate in the fourth quarter, thanks to strong uptake of the company’s new mass market EV L60 launched under the ONVO sub-brand. The planned launch of the Firefly brand early next year provides scope for further upside, he added.

Nio’s buoyancy is partly attributable to hopes of further stimulus announcement by China. Excerpts from China’s Vice-Minister of Finance Liao Min’s speech at the World Bank's 110th Development Committee meeting on Friday in Washington D.C. showed that China will increase the counter-cyclical adjustment of fiscal policy and implement a series of “powerful measures” to  achieve the country’s annual economic growth target of about 5%

Also, China has convened a meeting of the National People’s Congress Standing Committee on Nov. 4-8 in which officials are expected to announce fiscal stimulus plans, weighing in on the outcome of the U.S. presidential election, South China Morning Post reported.

Stimulus hopes gained further momentum after data released by China’s National Bureau of Statistics showed industrial profits plunging in September.

On Stocktwits, sentiment toward Nio shares turned from ‘neutral’ a day before to ‘bullish’ (70/100) although message volume improving to 'normal’

A Stocktwits user said Nio is headed toward $8 by the end of the week.

Another touted Nio as a hedge against a potential Tesla, Inc. ($TSLA) implosion as the latter’s CEO Elon Musk is making too many enemies.

As of 12:45 pm ET, Nio ADRs listed on the NYSE climbed 13.97% to $6. Nio’s U.S.-listed Chinese peers XPeng, Inc. ($XPEV) and Li Auto, Inc. ($LI) also headed northward. 

Read Next: Evoke Pharma's Retail Sentiment Soars As Stock Rockets On Promising Real-World Data For Gastric Disorder Drug

For updates and corrections email newsroom@stocktwits.com