Shares of Nio Inc. NIO, +1.66% rose 1.1% toward another record in premarket trading Thursday, bucking the big selloff in the broader market, after Citigroup analyst Jeff Chung turned bullish on the China-based electric vehicle company, citing a “very strong” order backlog, increased market share, lower battery costs and policy tailwind related to exports.
Chung raised his rating to buy, after being at neutral since March, and boosted his stock price target by 82.4%, to $33.20 from $18.10. “We estimate Nio’s accumulated order backlog (after deducting weekly shipments) to have increased by 100% to 7k units between now and end-Sep, implying a 1.5-1.8 month level,” Chung wrote in a note to clients.
“As such, we believe margin visibility has improved dramatically.” The upgrade and stock gain comes a day after the stock soared 22.6% to a record close Wednesday after a J.P. Morgan upgrade to buy.
Ahead of Thursday’s open, futures ES00, -1.15% for the S&P 500 SPX, -1.05% dropped 1.3%. Year to date, Nio’s stock has skyrocketed 559.2% through Wednesday, while U.S.-based rival Tesla Inc. TSLA, -1.45% shares have soared 451.4% and the S&P 500 has gained 8.0%.