Nio Again Upgraded – Funding ‘Advances Profitability’

Nio  (NIO) – Get Report on Wednesday received its second upgrade of the week, this time from a Morgan Stanley analyst who lifted the electric-vehicle maker to overweight from equal weight

Morgan Stanley analyst Tim Hsiao also raised his price target to $20.50 from $12.

American depositary receipts of the Shanghai company at last check were 11% higher at $19.73.

In a note to clients, Hsiao said the Hefei government’s recent $1.4 billion funding injection “not only removes funding risk but also advances Nio’s vehicle profitability and cash flow.”

Hsiao said Nio’s stock performance, funding access and industry franchise together create “self-reinforcing momentum and make Nio an even stronger player to grow its operations and investment value.”

“Despite performing more like a trading stock nowadays with significant volatility,” he said, “it’s also a growth stock with long-term value unfolding amid recent operational progress.”

Hsiao said Nio’s battery-as-a-subscription service offered lower usage cost and “will drive 10% to 36% incremental vehicle sales in 2021 through 2030.”

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