Nio Inc – (NYSE: NIO) has had a stellar year of trading, outperforming investor and analyst expectations. NIO stock has gained 334% over the past 6 months of trading, cementing its name as one of 2020’s best performing stocks. In addition, the Chinese EV manufacturer managed to deliver over 12,000 vehicles in the third quarter of 2020. With strong delivery and revenue growth, NIO has vanquished its domestic competition, Li Auto and Xpeng. With such success leading into 2021/22, this article will breakdown the 12 month forecast for NIO stock.
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What are analysts predicting for NIO stock over the next 12 months?
Firstly, analysts have boosted their 12 month price targets across the board this month. This is a clear cut sign NIO continues to outplay analysts and the smart money consensus. The average 12 month price target is currently $46.48 a share across the board of 17 analysts. However, in January 2021 alone the average price target from analysts sits at $72.26 a share. This suggests an upside potential of 20% from the current trading price. The following 12 month price targets from this month are below:
1/28/2021 Morgan Stanley – analyst Jack Yeung boosted the 12 month price target from $33 to $80 a share. This new target suggests an upside potential of 33% from the current trading price. Morgan Stanley also have an Overweight rating on NIO stock, representing a strong bullish sentiment from the Wallstreet banker.
1/12/2021 CitiGroup – analyst Jeff Chung at CitiGroup increased the 12 month price target from $46.40 to $68.30. This suggests an upside potential of 12%, and has driven some market stability since.
1/11/2021 Bank of America – analyst Ming Hsun Lee upgraded the 12 month price target from $59 to $70 a share. Similar to CitiGroup, the upside potential is upwards of 14%. This is another key price target that had pushed the stock price above $60 over the past month of trading.
1/11/2021 JP Morgan & Chase – Nick Lai and fellow analysts boosted the 12 month price target from $50 to $75 a share. This is currently the third highest standing price target from financial analysts (smart money).
What this means for investors?
The recent consensus amongst financial institutions remains bullish with price targets now pushing above the field of $70 a share. Although these targets will continue to update as we move further into 2021/22, the key snapshot suggests analysts are confident in NIO stock and a 20% growth over the next 12 months (based upon above price targets).
Revenue forecasts for 2021
Firstly, the average revenue forecast across 14 different analysts suggests 2021 revenue will increase by over 120% from 2.24 Billion in 2020 to 4.95 Billion. Secondly, vehicle sales in the most recent Q3 earnings were recorded at $628.4 million, which was an increase of 146% from Q3 revenue in 2019. The strong revenue performance has also been a result of NIO’s improving vehicle margin which now sits at 14.50%. Lastly, revenues are expected to grow at a similar rate for the fourth quarter with the company expecting 16,500 – 17,000 deliveries. This is likely to result in revenue between $921.8 million and $947.9 million according to NIO.
“We achieved a new record-high quarterly deliveries of 12,206 ES8s, ES6s and EC6s in total in the third quarter of 2020, followed by the best-ever monthly deliveries of 5,055 vehicles in October. In view of the growing market demand for our competitive products, we are motivated to continuously elevate the production capacity to the next level. We expect to deliver 16,500 to 17,000 vehicles in the coming fourth quarter.”said William Bin Li, founder, chairman and chief executive officer of NIO.
What does “smart money” suggest about NIO stock
Monitoring changes in buying and selling from fund managers and institutional ownership can portray what we call “smart money” sentiment. For all 4 quarters of 2020, NIO maintained more buying than selling from large institutions and fund holders. Another way to monitor “smart money” sentiment is to analyse the largest stakeholders and the changes in ownership. For example, UBS Asset Management currently holds $85 million stake in NIO, and increased their position by 8% for the quarter which is a good sign for investors.
What’s in the pipeline for NIO stock moving into 2021-22?
NIO have recently launched the BaaS and the 100kWh battery pack with proprietary thermal management and significant performance enhancement. This enables for lower initial purchase prices of vehicles and enhanced battery performance. 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, then they could set the industry standards. Ultimately bolstering NIO’s brand and market share in 2021, and beyond.
Written by Tyger Fitzpatrick
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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.