Why NIO Stock Is Higher Today

A discounted stock offering is prone to be bullish in spite of all the pieces, and Wall Facet motorway had good things to issue.

What occurred 

Shares of Chinese language electric-car maker NIO (NYSE:NIO) were consuming greater on Tuesday, after a successful secondary offering and bullish notes from two Wall Facet motorway analysts.

As of 11: 15 a.m. EST, NIO’s American depositary shares were up about 5.1% from Monday’s closing designate. 

So what

NIO mentioned on Monday that its deliberate stock offering had priced at $39 — about 7% below Friday’s closing designate — but that it modified into as soon as oversubscribed, meaning that the Investment banks working the offering had asked for added shares than the firm had at the muse deliberate to sell.

NIO’s shares fell the outdated day on that info, but on balance it wasn’t depraved info. It shows that there might perhaps be level-headed quite loads of investor hobby in NIO’s stock at what modified into as soon as basically factual a minor sever rate from most modern costs. 

A dark blue NIO ES8, an upscale electric SUV.

NIO’s flagship ES8 got an overhaul earlier this twelve months that increased its vary and added recent technologies. Sales of the revamped model had been factual. Image source: NIO.

I cling NIO’s shares are buying and selling greater at the present time on narrative of auto traders are seeing that bigger image. Two bullish notes from Wall Facet motorway analysts don’t seem like hurting.

First, Daiwa analyst Kelvin Lau initiated coverage of NIO on Monday with a capture ranking and a designate aim of $59. Lau thinks NIO is the “notorious” remove among the rising build of residing of upscale electric-car makers in China, and he sees the firm attending to adjusted profitability in 2023 with sales of about 140,000 autos. (For comparability, NIO is heading within the correct course to sell roughly 43,000 autos in 2020, up from 20,565 in 2019.) 

Now what

Deutsche Bank analyst Edison Yu additionally had certain things to issue about NIO the outdated day. In a demonstrate initiating coverage of NIO rival XPeng, he reiterated his thesis that NIO is among a community of 4 rising Chinese language electric-car makers that — along with Tesla — seem “increasingly extra destined to beat” China’s noteworthy recent-car market. 

Yu had mentioned in September that he thinks NIO is the chief of the community, and that it could well seemingly change into China’s subsequent “iconic auto model.” (Yu rated XPeng a capture with a $58 designate aim, by the formula. He thinks there might perhaps be tremendous room for a few companies to change into “winners” in China’s electric-car market.) 

For what it is rate, I tend to accept as true with both analysts: There will most likely be multiple winners in China’s EV market, but correct now NIO looks as if the chief among the domestic challengers to Tesla within the head class segments. The added funds from this stock offering (about $2.7 billion, give or remove) will develop the firm glance like an very just correct stronger wager. 


John Rosevear 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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