NIO Inc (NYSE:NIO) the shares were down up to 6% Falling demand for cars from Chinese consumers led to a downgrade of JP Morgan to Underweight and a 40% cut to its price target on Friday.
The new price target of $5 is 14% lower than Friday’s target closing price.
As the company continues to underperform Chinese peers, analyst Nick Lai cut his 2024 sales target to $10.1 billion from the consensus of $10.7 billion.
J.P. Morgan attributes the downgrade to the company’s slow sales in January and investor concerns about the company’s sales and earnings momentum in 2024, and admits the downgrade comes late given the 65% erosion in the stock price since August .
The lack of new models will also be a headwind for NIO (NIO), as the company’s weak lineup comes against the backdrop of new launches from rivals Xpeng (XPEV) and BYD Co (BYDDY, BYDDF), as well as the entry of a new competitor in the market. Electric Vehicle Market, Xiaomi Corp.(XIACY, XIACF).
The downgrade, coupled with Rivian’s (RIVN) double downgrade, is impacting the electric vehicle sector today with shares of XPEV (XPEV) down 5%, Lucid (LCID) down 4% and Tesla (TSLA) down 1%.
Analysts are largely bullish on NIO (NIO), with Seeking Alpha writers and Wall Street analysts rating NIO (NIO) a Buy, while Seeking Alpha’s Quant Rating a Hold on NIO (NIO).