Nio share price likely to react positively to cost cutting, says Morgan Stanley

Morgan Stanley notes that Reuters reports that Nio plans to cut its workforce by 10% this month as a move to streamline its operations and reduce costs. The firm thinks the share price is likely to react positively to the announcement, arguing that cost cutting “appears imperative” after the EV maker incurred notable cash burn and losses in the first half of 2023. The firm, which believes such move, if effective, should “gradually alleviate market concerns on cash flow and financials,” has an Overweight rating and $18.70 price target on U.S.-listed Nio shares.