NIO's fourth-quarter 2025 results were largely in line with expectations, but the management's sales and profit guidance for the full year 2026 significantly surpassed market expectations, capturing investor attention. According to a research report issued by JPMorgan on March 11, NIO's management has set a target for 2026 sales growth of 40% to 50%, translating to approximately 463,000 to 496,000 vehicles. This figure is notably higher than JPMorgan's previous forecast of around 30% growth, or 433,000 vehicles. Concurrently, management maintained its full-year Non-GAAP profit guidance, a stance described by JPMorgan as a "major positive surprise for the market," despite facing pressures from weak first-quarter demand and rising costs for raw materials such as memory chips, lithium, and copper. Following the announcement, NIO's U.S.-listed shares surged by 15%. JPMorgan maintained its Overweight rating on NIO with a target price of $7 (December 2026).
NIO's management's core strategy for 2026 revolves around driving sales growth through new and refreshed models. The management aims for sales growth of 40% to 50% this year, reaching 463,000 to 496,000 vehicles, exceeding JPMorgan's initial projection of 433,000 vehicles. JPMorgan stated it is conservatively maintaining its original sales forecast for now but acknowledges potential upside. On the profitability front, management anticipates a vehicle margin of approximately 18% for the first quarter, consistent with the fourth quarter, despite an estimated 37% sequential decline in quarterly deliveries and rising raw material costs. Management attributed the stable margin to a favorable sales mix driven by strong sales of the premium ES8 model and limited cost impacts. With sales expected to recover from the second quarter onwards, management reaffirmed its full-year Non-GAAP profit target. Consequently, JPMorgan significantly raised its profit forecasts: it now expects an adjusted net loss per share of RMB 1.33 for 2026, narrowed from a previous forecast of RMB 2.18, and forecasts an adjusted net profit per share of RMB 0.15 for 2027, revised upwards from a projected loss of RMB 0.09, representing a 256% increase.
JPMorgan's report highlighted the Onvo brand's L80 SUV as a critical factor for NIO's volume and profit in 2026. The model is expected to debut at the Beijing Auto Show in April and begin deliveries in May. JPMorgan believes the L80 has the potential to become a high-volume bestseller, forming, alongside the Onvo L90 and NIO's own ES9 SUV, the core pillars of NIO's 2026 sales volume. JPMorgan's China Auto Sentiment Index provides supporting evidence for this view. This AI-driven index indicates that buyer sentiment for NIO is bottoming out and recovering, with its sentiment index jumping from the historical 75th percentile to a record high, outperforming industry peers.
Furthermore, NIO's development of its own ADAS chip through its majority-owned subsidiary, Shenji Technology (holding over 60%), is seen by JPMorgan as not only enhancing NIO's autonomous driving capabilities but also potentially attracting external clients, including other automakers or suppliers, offering long-term strategic value. While the overseas expansion plans for the Firefly brand currently represent a small scale, JPMorgan views this as a potential long-term positive. JPMorgan's December 2026 target price of $7 is based on a blended average of 0.9 times projected 2026 price-to-sales ratio and 0.6 times projected 2026 enterprise value-to-sales. The valuation multiples used remain below the average for new energy vehicle startups, which is typically around 1 times price-to-sales and 0.8 times EV/sales.
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