Why NIO Stock Is Surging Today

It’s miles not in actual fact about the U.S. election — or the coronavirus.

What took space

Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were arresting bigger on Monday, amid a big U.S.-market rally and following a bullish display from a J.P. Morgan analyst. As of 11 a.m. EST, NIO’s American depositary shares were up about 6.2% from Friday’s closing worth.

So what

In a new display on Monday morning, J.P. Morgan analyst Rebecca Wen raised her worth target on NIO to $46 from $40, while conserving an chubby rating on the shares. 

Wen wrote that she believes that NIO shall be a “lengthy-term winner” in China’s upscale-electric-vehicle market, with a roughly 30% fragment of the segment by 2025. She believes that “a high valuation may perhaps perhaps well additionally be justified,” as NIO is reworking its industry mannequin to make a choice extra income through its “platform and say material offering,” as well to to direct sales of vehicles. 

A NIO ES8, an upscale electric SUV, inside one of the company's automated battery-swap stations.

As of final Friday, NIO had 158 of its computerized battery-swap stations up and working in China. The stations can “recharge” a NIO vehicle by swapping its battery in about three minutes. Image source: NIO.

NIO stated on Friday that it be along with a 100 kilowatt-hour (kWh) battery pack as an upgrade chance to its subscription battery-swap service. Earlier this year, the company rolled out the service, which lets in customers to acquire a NIO vehicle with out a battery pack (and thus at a in actual fact intensive upfront low cost), while paying a monthly fee for get admission to to the company’s computerized battery-swap stations.

Now what

Auto investors following NIO will desire to pay cease attention to the company’s third-quarter earnings document, scheduled for next Tuesday, Nov. 17. The earnings document itself wishes to be moral — NIO’s sales hit legend levels in the quarter. But the accurate files, given the company’s most in model quickly journey of innovation, may perhaps perhaps well additionally be round its outlook for the relaxation of 2020 and into next year.

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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