NIO (NYSE: NIO) captivated the EV market in 2020. However, 2020 will soon become history as we enter 2021. Thus, NIO investors are itching to uncover whether the 2021 forecasts are bullish or bearish. Considering NIO is taking on the nickname the “Tesla of China”, we could assume that the projections are bullish. Nonetheless, YIG would look to breakdown NIO’s 2021 forecast for our viewers today.
Table of Contents 1. NIO 2021 forecast - what's in store for the 2021 calendar? 2. Does YIG see value in an investment ahead of NIO's 2021 growth?
What does NIO have planned for 2021?
NIO expects its Battery-as-a-Service (BaaS) program to increase production, sales, and investor backing come 2021. Especially as Morgan Stanley analyst Tim Hsiao argues, reducing the cost for the end-user “will see NIO’s incremental vehicle sales increase by 10-36% between 2021-2030”. Tim further explains that if NIO could cement themselves as the BaaS captain, than they could set the industry standards. Ultimately bolstering NIO’s brand and market share in 2021, and beyond.
Another big talking point is NIO’s entrance into Europe and other international markets. NIO expects to open the European door in the second half of 2021. Ultimately adding to the expectations of more robust financials throughout 2021.
Lastly, NIO is expecting to deliver the ET7 to the market in early 2021. The BMW like design is capturing the eyes of car enthusiasts. However, making sure the ET7 experiences no delays in 2020 production is vital if NIO wants their EV sedan to be a knockout in 2021.
Does YIG see value in a NIO investment before 2021?
Before I begin, I am obliged to remind our viewers that this is not advice but rather investment commentary from extensive research
Short answer: Riding the short-term bullish momentum into 2021 seems like a smarter play (opinion, not advice)
NIO holds a bullish outlook for the rest of 2020 and into 2021. Leading investments banks UBS, Morgan Stanley, and Piper Sandler confirm NIO’s bullish 2021 forecast. Especially as Morgan Stanley and UBS both upgraded their NIO positions to over-weight and neutral, respectively, in August. However, the smart money needs retail investors to pour into the “Tesla of China” to set off an enormous rally. Better than expected Q3 and Q4 financials and increased production should convince more retail investors to pick up NIO shares. Considering, NIO already issued a strong outlook and expects to produce 11,000-15,000, vehicles, the chance of the buy-side increasing in high (opinion not advice).
Looming bear market could set NIO back
Despite NIO’s bullish 2021 forecast, riding the short-term momentum into 2021 seems like a smart play. Because it capitalises on the optimism and mitigates the risk of a disappointing 2021. However, all investors should factor in macro stock market corrections, as September shows signs of a bloodbath (opinion not advice). Overall the megatrends of autonomous vehicles and EV’s propelling society towards a greener future are in place for NIO to succeed. Also, the 2021 NIO perception is incredibly bullish, which could become a self-fulfilling prophecy. (opinion not advice) However, cut-throat competition, and the potential for analysts to become bearish, especially if the recession infects the stock market, could see NIO pullback before reaching its 2021 forecast of $30.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, Senior Manager of YIG.