Similar to the overwhelming majority of its competitors in 2024, the Chinese electric vehicle (EV) manufacturer Nio (NYSE: NIO) has faced considerable challenges since the year commenced.
The difficulties, mainly caused by demand that was slower than anticipated, have resulted in Nio being roughly 40% in the negative year-to-date (YTD) as of this writing.
Following a 7% drop on Wednesday that seemed to threaten the 30-day gains, NIO shares increased by 5.78% on Thursday morning, rising from the last closing figure of $5.02 to their current value of $5.30.
What is driving the rise in Nio stock today?
The increase can primarily be attributed to Nio’s upcoming launch of its new Onvo L60 model – widely regarded as a formidable competitor to Tesla’s (NASDAQ: TSLA) Model Y.
This new mid-sized vehicle is anticipated to enable Nio to capture a substantial portion of market share from Elon Musk’s EV company in China, particularly due to its comparatively low price of around $30,000.
Moreover, the Chinese EV manufacturer is expected to gain additional momentum shortly with its new Firefly brand – a development that could elevate the entire sector’s appeal, with price estimates ranging from $14,000 to $28,000.
Nio’s gains on Thursday may also be partially related to rumors about the company’s plans to acquire an Audi factory in Belgium. It is reported that Nio is preparing to submit a bid for the struggling factory as early as September 23.
While the Chinese EV maker has so far chosen not to comment on this speculation, recent changes in EU regulations – particularly new duties expected to impact Chinese manufacturers – lend credibility to these reports.
The introduction of the new vehicle and brand, along with the prospective Audi factory acquisition, could enhance investor confidence in Nio and may generate favorable conditions for the company if analysts decide to upgrade their predictions.
Is now a good time to buy Nio stock?
Surprisingly, despite its numerous challenges in 2024, Wall Street analysts have, as of September 19, largely maintained an optimistic perspective regarding the Chinese EV manufacturer.
Among the 34 analysts who have shared their insights over the past three months and are featured on the stock analysis platform TradingView, 21 view Nio as either a ‘buy’ or a ‘strong buy.’
Additionally, 12 maintain a ‘neutral’ stance on the stock, and merely 1 suggests selling.
The 12-month price target also appears promising following Nio’s setbacks since January 1. On average, analysts expect the Chinese automaker to increase by 29.78%, hitting $6.51 within the next 52 weeks.
Recent adjustments have also been predominantly cautiously optimistic. For instance, JPMorgan (NYSE: JPM) elevated its Nio stock recommendation from ‘neutral’ to ‘overweight’ and set a new price target of $8 on September 6.
On the same date, Tiger Securities reaffirmed its ‘buy’ rating for Nio stocks, maintaining the associated $8 price target.
On September 5, Bank of America (NYSE: BAC) upped its price prediction from $5 to $5.30, although it reiterated a ‘neutral’ stance.
Conversely, Citigroup (NYSE: C) decided to keep the ‘buy’ rating on September 4 but lowered the 12-month price target from $8.50 to $7.
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