Are Analysts Turning Negative on NIO Stock after Q4 Results?

Jitendra Parashar - Author

Mar. 7 2019, Published 12:21 p.m. ET

Analysts’ ratings on NIO

According to the latest consensus data compiled by Thomson Reuters, out of the ten analysts surveyed, 40% of analysts covering NIO (NIO) gave its stock a “buy” recommendation. The remaining 40% of analysts recommended a “hold.” The remaining 20% expect its stock to underperform the market and gave it “sell” ratings.

Investors should pay attention to popular analysts’ ratings, as they may affect the company’s stock price action. If a popular analyst changes his or her views, significant short-term movement in the stock price could follow. A couple of weeks ago, only one analyst out of a total ten was recommending a “sell” on NIO.

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Upside potential in next 12 months

As of March 6, analysts’ consensus 12-month target price on NIO was $8.04, which reflected a minor upside potential of ~0.4% from its market price of $8.01. Interestingly, NIO stock registered an all-time high of $13.80 on September 14, two days after it started trading on the NYSE on September 12. From this high, it has lost about 42.0% so far.

Nonetheless, a good percentage of Wall Street analysts are still positive on NIO, as it is one of the key electric vehicle makers from the world’s largest auto market, China. If the company manages to deliver better-than-expected revenue growth in the first half of 2019, most analysts may remain positive on the company for the long term.

February stock price movement

In February, NIO outperformed many of its peers, as its stock rose by 21.4% for the month. Auto companies such as General Motors (GM) and Tesla (TSLA) rose 1.2% and 4.2%, respectively, last month, while Toyota (TM), Honda (HMC), Ford (F), and Fiat Chrysler (FCAU) fell by 1.7%, 6.0%, 0.3%, and 14.4%, respectively.

Chinese firms (MCHI) such as Baidu (BIDU) and Tencent Holdings (TCEHY) lost about 5.8% and 4.0%, respectively, in February, while Alibaba (BABA), HUYA (HUYA), and Uxin (UXIN) rose 8.6%, 23.2%, and 35.2%, respectively.


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