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Analysts Are Turning Negative on NIO Stock after Its Q1 Results

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Analysts’ ratings on NIO

According to the latest consensus data compiled by Thomson Reuters, 50% of the analysts covering NIO (NIO) stock have given it “buy” recommendations. Another 25% of analysts have given it “holds,” and the remaining 25% expect the stock to underperform the market and have given it “sells.”

Investors should pay attention to popular analysts’ ratings, as they may affect the company’s stock price action. If an analyst changes his or her views, significant short-term movement in the stock’s price could follow.

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Upside potential in the next 12 months

On May 29, analysts’ 12-month consensus target price on NIO stock was $7.43, which reflected a potential upside of ~106% from its current price of $3.61. NIO stock posted an all-time low of $3.60 on May 29, a day after its first-quarter earnings event.

On May 29, Bank of America Merrill Lynch downgraded its rating on NIO stock to an “underperform” from a “neutral” with a price target of $3.00. The investment bank expects the demand for NIO’s ES6 and ES8 to disappoint, especially after a cut in the Chinese government’s subsidies on electric vehicles.

May stock price movements

So far in May, NIO has underperformed US automakers. As of May 29, NIO has fallen nearly 25.6% month-to-date. Auto companies General Motors (GM), Ford Motor Company (F), and Tesla (TSLA) have fallen 10.7%, 7.1%, and 20.5%, respectively, in the month.

Other Chinese companies Tencent Holdings (TCEHY), Baidu (BIDU), and Alibaba (BABA) have fallen 15.8%, 32.1%, and 17.8%, respectively, in May.

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