JP Morgan raises NIO to overweight from neutral; raises target price to $8 from $4.8

JP Morgan raises NIO to overweight from neutral; raises target price to $8 from $4.8

JP Morgan Chase & Co. has upgraded its recommendation for NIO Inc. (NIO) to overweight from neutral, raising its target price to $8 from $4.8. The move follows the Chinese electric vehicle maker's strong performance and strategic initiatives, particularly the launch of the ES8 SUV and the Onvo L90 model.

NIO stock has surged over 90% since June, driven by robust pre-orders for the ES8 SUV and the Onvo L90 model. The ES8, priced at $43,000 under the Battery-as-a-Service model, has generated significant interest, with pre-orders potentially exceeding 30,000 units. The Onvo L90 also received strong pre-orders, with estimates ranging from 30,000 to 35,000 units [1].

Morgan Stanley, which maintains a Buy rating and a $6.50 price target, has also highlighted the strong demand for the Onvo L90, contributing to a 9% cut in its 2025 sales estimate to 330,000 units. However, the 2026 and 2027 forecasts remain unchanged at 470,000 and 586,000 units, respectively [2].

JP Morgan's upgrade reflects optimism about NIO's restructuring efforts and the potential for sustained demand for its new models. The firm expects NIO to deliver 100,000 vehicles in the second half of 2025, up from its previous estimate of 80,000 units. The upgrade also acknowledges the company's cost-cutting measures, which have reduced operating expenses and net loss estimates for 2025-2027 by 10%, 13%, and 9%, respectively [2].

NIO continues to expand its global footprint, with plans to enter Singapore, Uzbekistan, and Costa Rica between 2025 and 2026. The company is also developing proprietary chips for smart driving features, aiming to reduce dependence on U.S. suppliers.

Despite the upgrade, market sentiment remains mixed, with Wall Street maintaining a Hold consensus rating and an average price target of $4.85. Some analysts question whether current valuations reflect realistic business fundamentals, while others remain optimistic about NIO's prospects [1].

The upcoming second-quarter earnings release and product launches are expected to provide further clarity on NIO's strategic direction and financial health.

References:
[1] https://parameter.io/nio-inc-nio-stock-new-es8-suv-launch-drives-90-rally-time-to-buy/
[2] https://www.ainvest.com/news/nio-stock-gains-morgan-stanley-ups-price-target-strong-onvo-l90-demand-2508/