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Could Nio Make a Comeback in 2022?
Stock Analysis & Ideas

Could Nio Make a Comeback in 2022?

Nio stock continues to craft lower lows and has declined over 44% in one year, implying that investors holding the ADR (American Depositary Receipt) of this Chinese luxury EV maker for over a year or so are sitting on significant losses. 

Investors maintain a negative outlook on Chinese stocks, including Nio, amid heightened regulatory concerns. TipRanks’ Stock Investors tool shows that 1% of the investors holding portfolios on TipRanks have decreased their stake in Nio (NYSE:NIO) stock in the last 30 days. 

Besides regulatory concerns, industry-wide supply-chain headwinds and production line upgrades remained a drag on Nio stock. 

What’s Next

Nio’s Q4 vehicle delivery numbers came in well within its guidance range despite supply-chain concerns. Nio delivered 25,034 vehicles in Q4. Nio previously projected Q4 vehicle deliveries to be in the range of 23,500 to 25,500. 

As for 2021, Nio delivered 91,429 vehicles, representing a year-over-year increase of 109.1%. 

While its 2021 vehicle delivery numbers came in strong, a lot would depend on new model launches and international expansion in 2022. Nio is expected to launch three new models in 2022. Further, it plans to expand in Europe with ramps in Norway, Germany, and the Netherlands in 2022. 

Vijay Rakesh of Mizuho Securities stated, “We believe 2022E sets up well for NIO as it ramps production, launches its ET7/ET5 sedans in Mar-22/Sep-22 and accelerates global expansion.” 

Rakesh expects the global expansion to contribute significantly to Nio’s growth in the future. He has a Buy rating on Nio with a price target of 65. 

Furthermore, the majority of Wall Street analysts also maintain a bullish view on Nio stock. Nio stock has received 7 Buy and 1 Hold recommendations for a Strong Buy analyst consensus rating. Moreover, the average Nio price target of $61.86 implies 107% upside potential to current levels.

It’s worth noting that hedge funds have been accumulating Nio stock on the decline. TipRanks’ Hedge Fund Trading Activity tool shows hedge funds have added 3.5M Nio shares to their holdings in the past three months. 

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Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

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