EV big Nio (NIO) will probably be within the highlight when it reviews second-quarter outcomes after market shut immediately. As the countdown to NIO earnings begins, Wall Street’s confidence backing the inventory is powerful. Based on Buys solely – 6, in complete – the inventory has a Strong Buy consensus score. The common worth of $64.50 suggests one-year good points of ~47%. (See Nio stock analysis on TipRanks)
The firm already reported supply figures for the quarter in early July. The EV maker recorded 21,896 deliveries in Q2, amounting to a 112% uptick from the identical interval final yr and coming in proper on the excessive finish of its steering. June was significantly robust, as for the primary time, Nio delivered over 8,000 autos in a month.
The quarter’s deliveries had been principally in-line with Deutsche Bank analyst Edison Yu’s forecast, though Yu believes that at 8.57 billion RMB, gross sales within the quarter will barely exceed the BBG consensus estimate of 8.30 billion RMB. The analyst has EPS at (0.44) RMB vs. The Street’s name for (0.50) RMB.
Yu thinks the persevering with world provide chain points will play an element within the 3Q outlook, noting the flooding in Germany has impacted the supply of air suspension shock absorbers. The analyst anticipates administration to forecast round 25,000 deliveries and income within the 9.0-9.5 billion RMB vary.
Other areas of curiosity to look out for within the earnings name will probably be further particulars concerning NIO’s “mass market brand.”
“This new brand would target the 150-250k RMB price range but could potentially have models at even lower price points,” Yu mentioned. Going by reviews within the Chinese media, NIO has tapped Tiecheng Ai, a former VP of Strategic New Businesses at WeWork China, and a detailed pal of NIO’s President Lihong Qin, to guide improvement of NIO’s lower-cost mannequin.
Nio can be increasing its footprint in Europe, and after getting into Norway and Germany, the Netherlands would be the subsequent port of name with Amsterdam set to be the situation of the corporate’s European HQ. Several job listings had been just lately posted on LinkedIn, amongst them for CEO of Battery Asset Company, Head of EU Marketing & User Development, and EU Fleet Sales Manager.
“This suggests to us that NIO intends to roll-out the BaaS option in Europe which would materially lower the upfront cost of a vehicle,” Yu famous. The analyst believes the primary batch of deliveries will hit the continent in September, beginning with roughly a number of hundred in Norway.
So, what does all of it imply for buyers? Ahead of the print, Yu reiterated a Buy score on NIO shares, together with a $60 worth goal. If appropriate, the analyst’s goal may ship one-year returns of ~38%. (To watch Yu’s observe document, click here)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is essential to do your individual evaluation earlier than making any funding.