Why NIO Stock Is Higher Today

April deliveries dangle been down a exiguous bit from March, nevertheless they dangle been factual ample for Wall Avenue.

What took place

Shares of Chinese language electric automobile maker NIO (NYSE:NIO) dangle been shifting elevated in early Trading on Monday, after the corporate’s April sales numbers confirmed it to be heading in the correct direction to meet its steerage for the second quarter.

As of 10: 30 a.m. EDT this day, NIO’s American depositary shares dangle been up about 4% from Friday’s closing place.

So what

NIO acknowledged on Saturday that it delivered 7,102 automobiles in April. That modified into down a exiguous bit from the 7,257 automobiles it delivered in March, nevertheless it undoubtedly modified into a factual displaying amid a shortage of semiconductors that has compelled NIO and other automakers to decrease manufacturing. 

A dark blue NIO ES8, a large electric luxury crossover SUV.

NIO’s flagship ES8, launched in 2018, got an overhaul and a long-fluctuate battery chance closing year. Gross sales dangle been factual thru the first four months of 2021. Image source: NIO.

NIO warned closing week that the chip shortage will restrict its ability to develop manufacturing as deliberate. NIO upgraded its manufacturing line over the cold climate and now has the capability to construct about 10,000 automobiles per month, nevertheless the shortcoming of chips will preserve its monthly output between 7,000 and 7,500 on the moment, CEO William Bin Li told auto investors closing week. 

Fixed with these numbers, NIO’s second-quarter manufacturing steerage calls for deliveries of between 21,000 and 22,000 automobiles. That would possibly perchance perchance well presumably be roughly double its year-ago total and up about 10% from the first quarter. 

The stock modified into shifting up on Monday because of April’s supply total modified into conveniently in accordance to closing week’s steerage, and because of two Wall Avenue analysts took repeat of that. 

Now what

NIO’s April sales experiences got factual marks from two Wall Avenue analysts, Morgan Stanley‘s Tim Hsiao and Mizuho’s Vijay Rakesh. The latter raised his place target on NIO to $65 from $60 on Monday on what he sees as a convincing first-quarter result and factual steerage despite the chip shortage. He maintained his remove rating on the stock. 

In a separate repeat on Monday morning, Hsiao wrote that place a query to for NIO’s automobiles appears rather strong, and he thinks that would possibly perchance give it some working flexibility as it works thru the chip shortage. He maintained his chubby rating and $64 place target on the shares. 

This text represents the realizing of the writer, who would possibly perchance perchance well presumably also disagree with the “legitimate” recommendation feature of a Motley Idiot top class advisory provider. We’re motley! Questioning an investing thesis — even undoubtedly one of our have — helps us all think severely about investing and build choices that help us become smarter, happier, and richer.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NIO Inc. The Motley Fool has a disclosure policy.”>

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