Why NIO Stock Is Down Today

Two objects of steady data weren’t ample to beat the selling stress.

What came about

Shares of Chinese language electric automobile (EV) maker NIO (NYSE:NIO) were buying and selling lower on Tuesday amid a substantial sell-off of EV shares, and despite steady sales outcomes and an upgrade from a longtime Wall Avenue skeptic.

As of 10: 30 a.m. EST right this moment time, NIO’s American depositary shares were down about 6.4% from Monday’s closing mark. 

So what

NIO became merely surely one of a community of EV shares that were buying and selling lower on Tuesday. Most of them comprise had right bull runs in latest months; a retreat is now not any shock and, a minimal of for the second, presumably need to now not dread lengthy-term-minded auto investors.

But absent that sector stress, NIO’s inventory might additionally otherwise be up on two objects of steady data. First, it reported its November deliveries earlier than the U.S. markets opened on Tuesday, and so that they were right: 5,291 vehicles delivered in November, a recent monthly file and a be conscious that query for the firm’s upscale electric SUVs has persevered to be right after its spectacular third quarter.

NIO factory workers celebrates the 5,000-unit milestone on October 29, 2020.

NIO built 5,000 vehicles in a month for the first time in October. It be now aiming to construct 7,500 monthly by the tip of the year. Portray provide: NIO.

NIO’s latest outcomes comprise won over a longtime Wall Avenue skeptic. In a recent describe on Tuesday morning, Goldman Sachs analyst Fei Fang upgraded NIO to neutral with a mark purpose of $59, announcing that NIO’s success in increasing its vehicles’ vary, its batteries-as-a-service program, and the sure outcomes of revamped Chinese language govt incentives appear at threat of make a choice its sales rising for a whereas longer.

An upgrade to neutral might additionally merely no longer sound love a lot, but Fang had beforehand rated NIO’s inventory as a sell, with a mark purpose of merely $7.70. That is a big replace for Goldman. 

Now what

NIO also acknowledged that it is attempting to velocity up a production-ability elevate it had deliberate to implement in early 2021. 

That ability elevate will allow NIO to construct about 7,500 vehicles monthly. The firm final upgraded its production line in September, boosting monthly output from around 4,000 to roughly 5,000, but query is already outpacing that elevate. 

CEO William Bin Li acknowledged within the center of the earnings call final month that he hoped to comprise the rise in recount by the tip of January; NIO acknowledged right this moment time that it is now aiming to comprise its production line and its suppliers up to that velocity earlier than the tip of December. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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