Nio: Breaking Down J P. Morgans Bullish Call

On the bottom line, however, the 17,353 EVs NIO delivered in the fourth quarter of 2020 cost the company a GAAP net loss of $0.16 per share, and an “adjusted” loss of $0.14 per share — twice the $0.07 pro forma loss Wall Street had predicted. Morgan’s Nick Lai “tactical” downgrade of the China-based electric vehicle maker, citing concerns that margins could deteriorate further the company will miss delivery goals. Morgan’s Nick Lai “tactical” downgrade of the China-based electric vehicle maker, citing concerns that margins could deteriorate further the company will miss delivery goals.

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To achieve these at the same time as new AMP rules were about to go into effect required proactivity. By using the combination, NIO maximised its cash investment return opportunities. Using Put/Call Ratio as an indicator of investor sentiment overcomes one of the key deficiencies of
using total institutional ownership, which is that a significant amount of assets under management are
invested passively to track indices.

NIO’s cash investment management approach is a good reference point for other fast-growing, homegrown companies in China facing evolving cash needs as they transition through different stages of their business lifecycle. “Bringing our history, global scope and experience, we also share our industry know-how and partnership with NIO’s treasury team to develop its expertise,” says J.P. Achieving prudent yield enhancement while meeting liquidity and security requirements are global best practices, particularly relevant in China in 2021 as corporations must revisit their cash investment approaches before the new AMP rules come into effect.

Yet meeting its newly broadened appetite for returns proved challenging at a time of ultra-low rates. In addition to reporting standard equity and debt issues, institutions with more than 100MM assets under
management must also disclose advantage and disadvantage of incorporation their put and call option holdings. Since put options generally indicate
negative sentiment, and call options indicate positive sentiment, we can get a sense of the overall
institutional sentiment by plotting the ratio of puts to calls.

The Morgan Stanley team raised their price target on Tesla shares by 60% to $400, from $250, and recommended investors move to an “overweight” holding. The shares were recently up more than 9% and the S&P 500’s best performers. Although we don’t know the exact number of vehicles that NIO has delivered as of June 28, it is certainly much more than the 100,000 mentioned by Grizzly Research. On April 7, 2021, the company announced the production of the 100,000th vehicle. Six weeks ago (May 15) NIO delivered its 200,000th vehicle and ended the month with cumulative deliveries of 204,936 vehicles — after delivering 7,024 units in May 2022.

Historical Target Prices and Ratings

True, even Lai doesn’t expect any of this to translate into actual net (or even operating) profits before 2023 at the earliest. These potential “various types of content” may also carry higher than average profit margins — in Lai’s view, high enough to raise the company’s gross profit margin from 8% in Q to as high as 12% to 13% as soon as Q3 2020. The team includes Adam Jonas, one of the highest-profile Tesla analysts. The new price target is the most-bullish on Wall Street, according to FactSet data.

$46 a share — isn’t that just a couple bucks more than the $44 NIO stock costs today? Regarding the overall new energy vehicle (NEV) market, Lai said he remains “constructive” this year, but he believes the growth rate will decelerate sharply, to 23% in 2023 from 80% in 2022. A listing would cap off a successful run for the company, whose family heirs stepped back from management duties about a decade ago. Since then, it has streamlined strategy, launched high-profile collaborations and experienced explosive growth in demand. Tesla Inc.’s Dojo supercomputer may add as much as $500 billion to the company’s market value through faster adoption of robotaxis and network services, according to Morgan Stanley. The consensus rating score for NIO is 2.30 while the average consensus rating score for auto/tires/trucks companies is 2.48.

“The more we looked at Dojo, the more we realized the potential for underappreciated value in the stock,” the Morgan Stanley analysts said. Tesla has been mentioning how Dojo gives it an edge in AI and self-driving technology since at least 2021. In July this year, CEO Elon Musk told investors that the carmaker plans to invest more than $1 billion on the project by the end of 2024. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Stock Trade Information

Like many start-ups, NIO has faced cash investment challenges, evolving as it has moved through different phases of its business life cycle. It has experienced rapid growth, combined with a torrent of investment capital, which created vast cash management challenges. NIO has a high cash burn rate due to the high cost of research and development. In addition, NIO’s treasury department needed security for its cash, USD liquidity across time-zones and above all, to avoid loss of capital. The Security and Class in the table below are shown exactly as filed by the investor. We do our best to track continuity of investments through acquisitions, and this will be reflected in
the table as changes in names.

For the demand and supply equation in the NEV market, we believe it is now a consensus view that demand will be very robust and we agree that competition will intensify in 2H21 after numerous new models arrive. Get this delivered to your inbox, and more info about our products and services. In addition, Lai believes NIO’s target for 2023 deliveries of 240,000 to 250,000 is “ambitious,” and he’s modeling for deliveries to be much lower, around 190,000. NIO’s (NIO) Q4 earnings were disappointing — and (most) investors were disappointed. We’d like to share more about how we work and what drives our day-to-day business.

The next version of Tesla’s full self-driving system, expected by year-end, and the company’s Artificial Intelligence day in early 2024 are worth watching, he added. The stock slipped about 4.2% since Jonas cut the recommendation on the stock to neutral in June. The supercomputer, designed to handle massive amounts of data in training driving systems, may put Tesla at “an asymmetric advantage” in a market potentially worth $10 trillion, said Jonas, and could make software and services the biggest value driver for Tesla from here onward. Enter your email address below to receive the latest headlines and analysts’ recommendations for your stocks with our free daily email newsletter.

Financial Calendars

Gold price is attempting a tepid bounce, snapping a two-day downtrend to three-week lows of $1,906 on Thursday. Gold price is finding a floor, courtesy of a minor pullback in the United States Dollar (USD) alongside the US Treasury bond yields. On the earnings conference call, NIO said it will enter the European market and has researched entering the US market according to Reuters. This website is provided “as is” without any representations or warranties, express or implied.

The initial public offering (IPO) could value Birkenstock at more than $8 billion (€7.4 billion), Bloomberg News reported previously. Tesla’s shares jumped Monday after Morgan Stanley analysts upgraded the stock, citing the potential of the supercomputer that Tesla is developing. Choosing JPM GL also meant 24/7 cross-market operational efficiency. NIO’s treasurers in China can quickly manage settlement of capital raised regardless of time zones or business hours.

Sign-up to receive the latest news and ratings for NIO and its competitors with MarketBeat’s FREE daily newsletter. Crucially, the Wall Street behemoth now expects NIO to capture 7 percent of the cumulative EV market by 2025. At a more granular level, JP Morgan predicts that NIO will capture a whopping 30 percent of the premium EV segment.

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The firm remains positive on NIO believing that the company’s vehicle margin will “hit a trough of ~15.5% in Q but rebound strongly to ~18-19%” in the second half of 2022. On Thursday, the stock had fallen as much as 5.9% to an intraday low of $8.31, the lowest price seen since July 2020, but bounced back to close up 2.9% at $9.09, amid a broad rally in the U.S.’s and China’s stock markets. What kinds of production rates should investors be looking for, then? Assume 20,000 units produced in Q1, and 22,500 in Q2 — that leaves 48,000 cars that NIO will need to build and ship in the second half of the year in order to hit its year-long production goal. That works out to 8,000 cars per month in Qs 3 and 4, and if NIO can do 7,500 cars a month with supply chain problems, it seems reasonable to assume it can do 8,000 a month without them. And yes, there’s a lot of corporate babble-speak in that statement, but roughly translated, what Lai is saying here is that he thinks NIO has the ability to not just sell cars to consumers, and collect money from making those sales.

After the myriad issues encountered last year, namely the zero-Covid policies’ impact on production alongside supply chain snags, investors will be hoping the uptick is a harbinger of things to come and not merely a one-off event. Earlier today, the EV maker reacted to the report saying it is “without merit and contains numerous errors, unsupported speculations, and misleading conclusions and interpretations”. In the meantime, Edison Yu, a Deutsche Bank analyst who follows the Chinese EV industry very closely said NIO could be negatively impacted during the second quarter, suggesting some downside to their existing 22,500 deliveries forecast.

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In fact, the number mentioned by Grizzly Research was achieved 14 months ago (April 2021) and the EV maker should have around 215,000 – 217,500 vehicles on the road, 115,000 more than the number indicated by the author of the report. To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Lai noted that one bottleneck that might prevent NIO from hitting this goal is the well-publicized deficit in automotive semiconductor chip supplies (and another, constrained supplies of electric batteries). The analyst sees these reducing production rates to perhaps 7,500 units per month in Q2, but easing up thereafter. To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

In addition, Lai believes NIO’s target for 2023 deliveries of 240,000 to 250,000 is “ambitious,” and he’s modeling for deliveries to be much lower, around 190,000. Founded nearly 250 years ago, Birkenstock has become a high-fashion brand, launching collaborations with luxury names such as Dior, Manolo Blahnik and Valentino, and https://1investing.in/ spawning variants from labels including Celine and Givenchy. Sign up for updates on the ways we are using our expertise, data, resources and scale to open new pathways to economic opportunity and drive inclusive growth in communities around the world. Upgrade to MarketBeat All Access to add more stocks to your watchlist.

An OEM books all the revenue when it sells the cars to customers while the AFC (whose underlying asset or collateral is the car) recognizes monthly mortgage fees paid by customers. According to JPMorgan analyst Nick Lai, NIO’s Q4 was “solid,” and even a “meaningful beat” if you back out the “unrealized foreign exchange losses” that were the primary reason NIO lost twice as much money as analysts had anticipated. According to the issued ratings of 10 analysts in the last year, the consensus rating for NIO stock is Hold based on the current 7 hold ratings and 3 buy ratings for NIO. The average twelve-month price prediction for NIO is $12.68 with a high price target of $19.20 and a low price target of $7.50. In Q4, NIO reported $1.02 billion in quarterly sales, inching past analysts’ predicted $1.01 billion.

The chart to the right plots
the historical put/call ratio for this instrument. NIO is scheduled to report 1Q2i results around May 28″. We expect a further uptick in revenue (YoY and QoQ) and continued expansion in margins. We retain our full-year estimate unchanged for now. On near-term chip shortage and production shortfall, we believe the impact on 12-month forward earnings will be limited if supply tightness eases towards year end, as we anticipate.

• The bank expects the Chinese EV player to expand its Gross Profit Margin (GPM) by 12 percent in the pertinent quarter.
• And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
• The December delivery numbers come in the wake of the company’s December 24th NIO Day.
• The firm remains positive on NIO believing that the company’s vehicle margin will “hit a trough of ~15.5% in Q but rebound strongly to ~18-19%” in the second half of 2022.

Finally, the Wall Street giant expects NIO to debut a new sedan at the NIO Day, currently scheduled for December 2020. This will expand NIO’s product portfolio, currently consisting of the ES6 and ES8 SUVs as well as the EC6 crossover. J.P. Morgan analyst Nick Lai upgraded the stock of Chinese electric-vehicle maker NIO to Buy from Hold on Wednesday, taking his price target all the way to $40 from $14. That is double NIO’s average price over the past month and nearly double where the stock was trading before the bullish call. The downgrade comes a day after NIO (NIO) reported a wider-than-expected fourth-quarter loss, as vehicle margins contracted sharply, and provided a downbeat first-quarter revenue outlook.

Analyst Nick Lai slashes stock price target by nearly 30%, sees management’s 2023 delivery forecast as ‘ambitious’

Nevertheless, in NIO’s target premium segment, we expect relatively limited competition and forecast the company to double its sales to 90k units vs. 44k last year. The bank said in a research note on March 28 that assuming NIO delivers 19,500 units in the first quarter and all else remains equal, this represents a potential 2/3% top/bottom line shortfall respectively against their forecasts. Chinese electric car manufacturer NIO Limited (NIO) just may be one of the hottest stocks in an already overheated stock market. In the past 52 weeks alone, NIO stock has gained 2,138%, and according to J.P.

• It has experienced rapid growth, combined with a torrent of investment capital, which created vast cash management challenges.
• Chinese electric car manufacturer NIO Limited (NIO) just may be one of the hottest stocks in an already overheated stock market.
• At least in JP Morgan’s view, there is nothing to worry about yet.
• Assume 20,000 units produced in Q1, and 22,500 in Q2 — that leaves 48,000 cars that NIO will need to build and ship in the second half of the year in order to hit its year-long production goal.
• After hitting what appears to be rock bottom for the altcoin, APE is attempting to recover, with the ecosystem’s token unlocking event likely to deter it.

Chinese electric carmaker NIO suspended production for five days this week because of a chip shortage, prompting many investors to ask if this is something to worry about. At least in JP Morgan’s view, there is nothing to worry about yet. NIO’s stock has tumbled 30.8% over the past three months through Thursday, while shares of China-based rivals XPeng Inc. (XPEV) have dropped 18.5% and Li Auto Inc. (LI) have rallied 11.2%. The company saw revenue rise 29 per cent to roughly €1.2 billion last year, leading to adjusted earnings of €394 million. Sales have been boosted of late by the blockbuster Barbie movie, whose star Margot Robbie sports a pair of pink Birkenstocks in one scene. The German footwear maker, whose iconic sandals are worn by hippies and preppies alike, plans to list its shares on the New York Stock Exchange under the symbol BIRK, according to a filing on Tuesday.