Nio Hits BofA's Recently Revised Price Target In June Rally

Shares of Chinese electric vehicle manufacturer Nio Inc – ADR NIO have been on a roll since the start of June, with year-to-date gains of about 70%.

Industry, Company Fundamentals Improve: Nio's strong gains are predicated on improving fundamentals at the company, with order growth and cost discipline propping up the top- and bottom-line.

In late May, the company reported better-than-expected bottom-line performance despite a top-line miss, with revenue impacted primarily by the COVID-19 pandemic.

The company has picked up since then. After bottoming in February, orders have started to rebound. Nio is now projecting record deliveries of 9,500-10,000 vehicles in the second quarter.

Industry fundamentals have also bottomed. The Chinese EV market is slowly and steadily improving in the wake of the coronavirus — and the softness induced by the government's cutback in EV subsidies.

Stellar Stock Gains: From $3.98 at the end of May, Nio gained about 72% through Monday. On June 2, the stock added about 20% following a Goldman Sachs upgrade from Neutral to Buy with a $6.40 price target.

With the company reporting strong order growth for May, the stock continued to head higher and breached the $6 level.

Although an equity offering announced June 10 led to a pullback in shares, the stock has resumed its uptrend.

On Monday, the stock jumped about 12% before settling at $6.83.

The stock opened Tuesday's session at $7.43, above BofA Securities' recently revised price target of $7.30 and rose to a high of $7.44 amid the news it has closed its 72-million-ADS offering at $5.95 per share, raising $428.4 million.

The stock has pulled back since then and was last seen down 1.68% to $6.72. 

Related Links:

Nio's History Of Capital Raises: A Look At The Chinese EV Manufacturer's Debt

Nio Analyst Projects Upside On Stronger Orders, Improving Margins, Cash Flow

Photo courtesy of Nio.