$NIO : Double down in 2024? Read & decide.
Light at the end of the tunnel ?
Is there light at the end of the tunnel for $NIO Inc.(NIO)$ in 2024?
According to media news Finbold, there is despite the recent price fluctuations. (see below)
The last 60-odd weeks (1 year & 2 months) have been tough for the electric vehicle industry.
It saw their shares decline significantly in the stock market due to some or all of the following reasons.
Slowdown in demand.
Pivot hybrid models.
Forced manufacturers to lower prices.
The most alarming developments stemming from the trend have been analyst predictions that $Tesla Motors(TSLA)$ might find its stock crashing to about $23.
This stemmed from the facts that Elon Musk’s company sold only one EV in South Korea in January 2024, and $Lucid Group Inc(LCID)$ lost its spot on the Nasdaq 100 index and hitting its all-time low early 2024.
This week finally brought some positive news and an uptrend for some EV makers, including NIO which after months of near-continuous decline, rose nearly +5% in the last 5 trading days.
NIO’s rally X-factors.
It’s recent rally can be attributed to several developments, one of which is Fed’s chairman reiteration that the Central Bank hopes to trim interest rates 3 times in 2024.
Although the open-ended statement is filled with uncertainty, it did stem the rising tide of pessimism surrounding the inflation fight that has been picking up speed since the start of the year.
For NIO, the EV maker has announced in January that it has entered into a comprehensive 5-year agreement with $Contemporary Amperex Technology Co.,Ltd.(300750)$, a leading Chinese electric battery company. (see above)
Both companies will advance technological cooperations on:
“New brands, new projects and new markets.
Improve supply-demand coordination.
Propel overseas expansion.
Develop the business model centering on long service life batteries.
Most importantly, NIO has a strong delivery report for January 2024. It registered an +18% increase when compared to January 2023. (see above)
Analysts 12-month forecast.
With all the recent and positive developments, it is not a surprise that Wall Street analysts appear generally bullish on NIO.
What is interesting, is how much of an upside they forecast.
On average, the 10 experts analyzed by TipRanks see the EV maker’s stock surging +81.27% to $10.55 per share, within 2024. (see below)
Tipranks - rating for NIO in 2024
Tipranks - NIO share price forecast
Still, a lack of unanimity and the broader uncertainty is best reflected in the fact that,
Despite the massive, expected upside, NIO is only ranked as a “moderate buy” and has 6 “Buy” ratings, and 4 analysts remain “Neutral”, all due to a of unanimity and the broader uncertainty.
Opinions on NIO's worth may differ, with price targets ranging from $8 to $18.70.
On thing remains clear, that is all 10 analysts tracked by TipRanks, predict NIO to outperform its current price of $5.82 (as of 09 Feb 2024).
Price analysis.
In spite of the overall positive sentiments, the one-week chart is the only commonly used timeframe in which NIO is in the green.
While the company is up +4.68% in the said period, the 08 Feb 2024 trading day, saw a -0.62% decline to $6.00 per share.
NIO has also declined by as much as -23% in the last 30 days.
Should investors zoom out further, they will see, a sea of red as Nio has declined by:
-30.88% YTD.
-44.41% in the last 52 weeks.
It is 41.21% in the red on the all-time chart.
My viewpoints: (mine & mine only)
I feel the writing style or approach is “weird” because most posts would rather start off negatively and ends off positively (optimistically).
The Finbold’s post is the opposite. It makes me wonder whether the writer is truly optimistic about NIO’s 12 months performance?
The delivery comparison between Jan 2024 and Jan 2023 is “inaccurate”. Western writers do not understand Asia culture.
In 2023, Chinese New Year fell in January, 22 & 23. In China, this means people would have starting annual “mass migration” (back to hometown) as early as mid-Jan 2023, affecting manufacturing and delivery in the process.
In 2024, Chinese New Year fell in February 09 & 10. Mass migration would have commenced in February itself, enabling “full” manufacturing and delivery in January.
I still hold NIO’s management team for its (a) reckless ambitions and (b) wrong prioritization of precious resources on its projects, that caused its demise and downfall.
Development of a mobile app is a complete waste of company’s time, money and resources. Now it has to maintain it with an annual expense to keep the white elephant going.
As a spreading themselves too thin, their goal to develop “autonomous driving” have been side-stepped, leaving NIO’s EV “incomplete”.
Its foray into Europe has been so quiet and un-reported. This could only mean “disaster” and more money poured down the drain. No updates on NIO’s tie up with local distributors too.
Hopefully its diffusion line of EVs (targeted to launch by H1 2024) would be the saving grace for this misguided EV maker.
Secretly, I hope that NIO’s stock price could end up in the $18 region by end 2024. Who wouldn’t?
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Well said we'll see