Barclays Analyst Downgrades Nio to Strong Sell Amid Weak Sales Performance

By Don Francis, Editor
April 3, 2024 7:44 AM UTC
Barclays Analyst Downgrades Nio to Strong Sell Amid Weak Sales Performance

Barclays's Jiong Shao downgraded their rating on Nio (NYSE: NIO) from Hold to Strong Sell on 2024/04/02. The analyst also lowered their price target by 20% from $5 to $4.

Shao's decision to downgrade Nio comes after weaker-than-expected sales performance in March 2024. The analyst believes that this indicates potential trouble for the company in selling its newly launched 2024 models. Shao stated, "With weaker 2024/03 sales indicating that Nio might have trouble selling the 2024 models that launched last month, the Street's FY 2024 estimates are now at significant risk."

Shao further explained that the slower-than-expected deliveries in Q1 2024 were in line with the company's updated guidance of 30,000, but fell short of its initial guidance. This implies weak sales momentum for the new models. Additionally, Shao cautioned that due to limited new product launches planned for the rest of 2024, it is highly unlikely that Nio will be able to meet consensus estimates for the remainder of the year.

The analyst rating for Nio is currently split, with 50% of top-rated analysts considering it a Strong Buy or Buy, while the other 50% either recommend or strongly recommend selling the stock. It is important to note that no analysts currently see Nio as a Hold.

Since Nio's last quarterly report on December 31, 2023, the stock price has experienced a significant decline. It is down 49.9% and has also witnessed a year-over-year decrease of 53.7%. During this period, Nio has been trailing the S&P 500, which itself has experienced a decline of 26.2%.

Jiong Shao, the Barclays analyst who downgraded Nio, is ranked in the top 24% of Wall Street analysts by WallStreetZen. Shao specializes in the Real Estate and Technology sectors, among others. With an average return of 4.3% and a win rate of 45.1%, Shao has a proven track record in the industry.

Nio Limited, the company in focus, designs, manufactures, and sells electric vehicles primarily in China but also in Hong Kong, the United States, the United Kingdom, and Germany. The company offers various electric SUV models with seating capacities ranging from five to seven. Nio is also engaged in providing energy and service packages to its users, as well as marketing, design, and technology development activities. The company is involved in the manufacture of e-powertrains, battery packs, and components. Furthermore, Nio offers charging solutions and value-added services such as insurance, repair and maintenance, and roadside assistance.

Nio Limited, formerly known as NextEV Inc., was founded in 2014 and is headquartered in Shanghai, China. The company has a strategic collaboration with Mobileye N.V. for the development of automated and autonomous vehicles, as well as collaboration agreements with various manufacturers for the production of its high-performance electric SUV, the ES8.

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