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Shares of electric-vehicle maker NIO have fallen 25% since the end of March.
Lintao Zhang / Getty Images
Chinese Covid-19 lockdowns have hurt electric-vehicle sales and production since the end of March, putting pressure on share prices. Although there is light at the end of the tunnel.
Mizuho
Recently hosted by analyst Vijay Rakesh
NIO
(Ticker: NIO) at a brokerage event. He noted that supply-chain delays are improving and that production should return to pre-downtime levels by June. This is a welcome development for tired EV investors.
EV stocks have been hit since the Chinese Covid-19 inflation accelerated in March. Shares of NIO have fallen 25% since the end of March. Stock among peers
Expang
(XPEV) and
Lee Auto
(LI) 20% and 12% less in the same span, respectively.
Tesla
(TSLA) shares fell nearly 39%.
There are other reasons to drive the share price, such as inflation and in the case of Tesla, the potential purchase of CEO Elon Musk
Twitter
(TWTR). But covid lockdown has also been a big problem in China.
This past Thursday, Wedbush analyst Dan Ives quoted Chinese Headwind as lowering its Tesla price target from $ 1,400 to $ 1,400. Tesla delivery estimates fell to about 275,000 units from about 350,000 units at the end of February. This is all due to delays and delays in production at the company’s Shanghai plant. And NIO’s second-quarter sales estimates rose to about $ 1.7 billion from $ 2.1 billion at the end of February.
“The NIO could potentially return to pre-shutdown levels in early June, as May production has improved week by week since Shanghai reopened,” Rakesh wrote in a report on Sunday. He found that NIO’s plant was ramping up 240,000 vehicles a year by the third quarter. NIO has supplied about 95,000 units in the last 12 months. The analyst added, “NIO is qualifying multiple suppliers for key components to avoid the potential future impact of supply constraints.”
In addition to production news, Rakesh further mentioned that the company is making progress on its advanced driver assistance software, European expansion plans and battery costs. NIO is using high, low cost, lithium-iron-phosphate battery chemistry in its vehicles. This is a step that has helped many EV manufacturers cope with rising costs.
Rakesh is a NIO bull. He rates buy shares and targets a মূল্য 60 price per share. That’s about 264% higher than the $ 16.44 level that closed on Friday. That implied return is high because the shares are badly beaten. Coming into Monday trading, NIO stocks are about 48% off so far and 70% higher than its July 52-week high of $ 55.
Rising interest rates, inflation, and fears of delisting U.S. listed foreign stocks that do not meet U.S. accounting standards have weighed on NIO stocks.
Rakesh is not alone in his opinion. More than 94% analysts are covering buying NIO stock rate shares. The average buy-rating ratio for stocks is 8
S&P 500
About 58%. The average analyst price target is around $ 39, below Rakesh, but 130% higher than the recent level.
NIO stock fell nearly 0.7% at the start of Monday. XPeng reported lost earnings on Wall Street estimates, but guidance for the second quarter was slightly lower than analysts’ projections. The Covid-19 was the cause of the weak direction. It could also weigh on NIO shares.
XPeng stock is down about 0.3% in premarket trading. S&P 500 and
Dow Jones Industrial Average
Both futures are up about 0.9%.
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