Nio (NYSE: NIO) stock has been on a tear lately, and that continued as this trading week got underway. The Chinese electric vehicle (EV) maker’s American depositary shares jumped as much as almost 15% this morning. As of 2:45 p.m. ET, those shares were still trading higher by 11.1%.
Today’s move comes after a Wall Street analyst became bullish on the company and its new mass-market brand. The stock is now up by about 33% over the last three months.
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According to reports, Macquarie’s Eugene Hsiao boosted his rating on Nio to the equivalent of a buy on Monday. (He previously had a neutral rating on the stock.) Hsiao’s $6.60 price target would represent a gain of 25.5% from Friday’s closing price. Hsiao upgraded the stock because he thinks Nio’s fourth-quarter sales could get a boost from a new catalyst.
October is the first full month for shipments of Nio’s new Onvo brand. The Onvo L60 midsize SUV has a low starting price of about $30,000 and is intended to take on Tesla‘s Model Y.
Investors took note of Hsiao’s optimistic belief that the Onvo model will accelerate sales for Nio in the fourth quarter. Nio should provide guidance for the fourth quarter when it reports Q3 results, and those results should be released in the next several weeks. Investors may already have been anticipating Onvo becoming a new catalyst to increase sales. But if the company impresses investors with updates on the new brand, there could still be more room for Nio shares to run.
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Howard Smith has positions in Nio and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Nio Stock Surged Higher Monday was originally published by The Motley Fool
