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Nio’s stock bounces after J.P. Morgan analyst raises target, but expects ‘pullback’ near term

Shares of Nio Inc.
NIO,
+1.11%

bounced 2.7% in premarket trading Wednesday, after J.P. Morgan analyst Nick Lai raised his stock price target to $14 from $11, saying he believes new-energy vehicle (NEV) demand in China could accelerate. Meanwhile, Lai kept his rating at neutral, saying he believed valuations were “stretched.” Nio reported early Tuesday a narrower-than-expected second-quarter loss and revenue that rose more than forecast. The stock had soared as much as 12% before Tuesday’s open, before reversing course to close down 8.6%. “Top down, we are optimistic about the ‘smart EVs’ trend, which is particularly fast in China, incl. EV start-ups, and we believe penetration of NEV demand in China could accelerate from here, more than doubling from 5% in 2019 to 14% by 2025E,” Lai wrote in Wednesday’s research note. “On the flip side, we believe valuations are getting stretched and expect to see a share price pullback near-term — hence our neutral stance.” The stock has more than tripled (up 223.1%) year to date, shares of U.S.-based rival Tesla Inc.
TSLA,
+9.18%

have also more than tripled (up 228.5%) and the S&P 500
SPX,
+1.29%

has gained 3.2%.

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