Nio Stock Has 10% Upside, According to 1 Wall Street Analyst

Nio (NYSE: NIO) might be making progress on several fronts, but the stock hasn't been reflecting it. And now, one Wall Street analyst has cut his firm's price target on the Chinese electric vehicle (EV) maker by one-third.

J.P. Morgan's Nick Lai has suggested owners of U.S.-listed Nio shares continue to hold them but doesn't recommend buying more right now. He has slashed his price target on the shares from $7 to $4.70, according to reports.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

The new target price still represents about 10% more upside from recent levels, but Lai doesn't think the business is growing the way it should. Investors seem to agree: The stock has dropped more than 20% over the last year.

Nio's brand shift

Lai's issue with Nio is where its sales are coming from. Its 2024 vehicle deliveries rose nearly 40% versus 2023, but its newest EVs are high-end luxury cars like its ET9 executive sedan. With a list price starting at about $100,000, that type of EV has a limited market.

Nio launched a lower-priced brand called Onvo last year, but sales of that family-focused, smart EV only represented about one-third of deliveries in December and January. The company is working to grow its mass market appeal, though.

A new budget brand called Firefly is a compact hatchback EV. The official launch is expected in April. It may still be early to buy Nio stock, but investors with a long-term view could see benefits starting to come from its lower-priced brands in the next year. If EV sales do accelerate with the help of Onvo and Firefly, the stock may very well respond. That could take another year or so, though.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $323,686!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,026!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $545,283!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 3, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Howard Smith has positions in Nio. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.