Why NIO Stock Climbed 16.9% in January

The electric car firm’s half stamp has skyrocketed roughly 1,410% over the final 365 days.

Keith Noonan

What took advise

Shares of NIO (NYSE:NIO) rose 16.9% in January in step with files from S&P Global Market Intelligence. The China-primarily based electric car (EV) stock won ground on memoir of precise transport numbers, favorable analyst coverage, and continued market enthusiasm for the industry.  

NIO Chart

NIO files by YCharts

NIO published its month-to-month industry update numbers on Jan. 3, reporting that December car deliveries had surged 121% 365 days over 365 days to hit 7,007. Substantial analyst corporations also most frequently put forth very favorable outlooks for NIO in January, which helped increase determined sentiment across the car numbers and push the firm’s half stamp better. 

A NIO EC 6 electric vehicle.

Image source: NIO.

So what

Outside of a ratings downgrade from Citi, necessary analysts had been most frequently determined on the EV leader and its doable to stick to it the promise of being the Tesla of China. Citi’s Jeff Chung downgraded his ranking on the stock from select to neutral in a bid published on Jan. 11. Nonetheless, he peaceful raised his one-365 days stamp aim on the stock from $46.40 to $68.30 per half, and each other analysts had been considerably more bullish. 

Deutsche Bank analyst Edison Yu also published a bid on the stock on Jan. 11, affirming a select ranking and hiking the agency’s stamp aim from $50 to $70 per half. Nomura than initiated coverage of NIO stock on Jan. 22, with analyst Martin Heung giving the stock a select ranking, atmosphere a stamp aim of $80.30 per half, and praising the firm’s Tesla-enjoy formula to constructing out its electric car industry. 

At final, Morgan Stanley’s Tim Hsiao closed out the month with some very bullish coverage on the Chinese language EV leader. The analyst published a bid on Jan. 28, affirming an obese ranking on NIO stock and raising the agency’s one-365 days stamp aim from $33 to $80.

Now what

NIO published its most in style month-to-month car transport files on Feb. 1, and the outcomes had been impressive. The firm delivered 7,225 autos in January, an lift of roughly 352% compared with the prior-365 days interval. 

China represents a huge market with roughly 1.4 billion folks, and authorities efforts to switch the country to EVs most frequently is a noteworthy lengthy-time frame tailwind for NIO. The country is particularly reducing nationwide subsidies for buying electric autos by roughly 20% this 365 days, but adoption could possibly well peaceful peaceful observe precise momentum over the following decade, and NIO could possibly well additionally be ready to glean a service-primarily based industry around its self reliant driving instrument.

NIO has a market capitalization of roughly $89 billion and is valued at approximately 18.5 times this 365 days’s anticipated sales. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.”>

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