Why This Nio Analyst Has Slashed Its 3Q Delivery Estimate By 12%

US Tiger Securities analyst Bo Pei has lowered his estimate for Nio Inc's NIO third-quarter deliveries by 12%, according to a research note.

What Happened: “Due to softer demand and industry competition, we are lowering 3Q delivery estimate by 12% from 41,718 to 36,856,” Pei said in his note that analyzed the Chinese electric vehicle firm.

Also Read: Nio's August EV Deliveries Rise, Bucking Wider Trend As Rivals Xpeng, Li Auto See Numbers Fall Sequentially

Top Risks: Among the top risks Nio faces include a highly competitive EV market led by Tesla Inc TSLA and increased scrutiny of Chinese companies by U.S. securities regulators, Pei said.

"As a Chinese company, Nio might face more data security scrutiny when entering overseas markets," he added.

Rating Unchanged: Pei maintained his ‘buy’ rating on Nio, with a price target of $35. 

“Our $35 (unchanged) price target is based on 3.8x 2023 estimated sales of $15 billion. We'd note that 3.8x is meaningfully lower than Tesla's current level of 7.8x,” Pei said.

Deliveries: Nio sold 10,677 cars in August, recording an 81.6% rise in deliveries from a year ago. On a month-on-month basis, deliveries were 6.2% higher than the 10,052 cars it sold in July. 

Price Action: Nio's U.S. shares ended Thursday 5.6% down at $18.795, before falling 0.4% in extended trading, according to data from Benzinga Pro.