TLDR
- NIO shares climbed 5.9% on Monday, extending a rally that has pushed the stock up over 15% in the past week
- The surge follows the company’s Onvo L90 SUV product launch last week, with the three-row vehicle priced at RMB 279,900 ($39,040)
- Official launch is expected by month-end with deliveries starting August 1 in China
- Morgan Stanley maintains Buy rating with $5.90 price target, expecting the Onvo L90 to be a catalyst
- NIO delivered 24,925 vehicles in June, up 17.5% year-over-year, with 6,400 being Onvo brand vehicles
NIO shares jumped 5.9% on Monday, trading as high as $4.22 before closing at $4.13. The move came with heavy volume as approximately 44 million shares changed hands during the session.
The rally appears driven by continued momentum from the company’s Onvo L90 product launch held last Thursday. NIO announced the large three-row SUV will start at RMB 279,900, or about $39,040 in US dollars.
Customers can also choose the battery as a Service option, which brings the price down to RMB 193,900. This subscription model has been a key part of NIO’s strategy in the Chinese market.
The official launch for the Onvo L90 is expected by the end of July. Deliveries are planned to begin on August 1 in the Chinese market.
Analyst Support Drives Confidence
Morgan Stanley recently reiterated its Buy rating on NIO with a price target of $5.90. The analyst firm expects the Onvo L90 launch to serve as a catalyst for the company.
The stock has rallied more than 15% over the past week following the product announcement. Monday’s gains extended that momentum despite broader market conditions.
NIO currently trades with a consensus price target of $4.74 among analysts. One research analyst rates the stock as a sell, nine have hold ratings, two have buy ratings, and one has a strong buy rating.
Goldman Sachs recently upgraded NIO from a sell rating to neutral and boosted their price target from $3.70 to $3.80. The upgrade came in mid-June as the firm became more optimistic about the company’s prospects.
Recent Delivery Performance
At the beginning of July, NIO reported it delivered 24,925 vehicles in June. This represented a 17.5% increase on a year-over-year basis.
Of those June deliveries, 6,400 were Onvo brand vehicles. The Onvo sub-brand represents NIO’s push into the mass market segment.
For the second quarter overall, NIO delivered 72,056 vehicles. This marked a 25.6% increase compared to the same period last year.
Cumulative deliveries reached 785,714 vehicles as of June 30. The company has been steadily building its delivery volumes in the competitive Chinese EV market.
NIO recently guided for second-quarter sales between $2.69 billion and $2.77 billion. Analyst estimates had been calling for $2.78 billion in revenue.
The company is expected to report a second-quarter loss of 30 cents per share when earnings are released. Revenue expectations stand at $2.76 billion for the quarter.
NIO missed analyst estimates on both revenue and earnings in the past two quarters. The stock remains down about 10.5% year-to-date despite recent gains.
The stock trades well below its 52-week high of $7.71 reached earlier this year. Current levels around $4.13 represent the recent recovery from lower trading ranges.
Institutional investors have been active in NIO shares recently. UBS Asset Management boosted its holdings by nearly 4,000% during the first quarter, now owning over 5.3 million shares worth approximately $20.3 million.
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