Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

CLSA cuts Nio to Outperform after Q4 report; estimates and price target also reduced

Published 03/06/2024, 08:50 AM
Updated 03/06/2024, 08:53 AM
© Reuters CLSA cuts Nio to Outperform after Q4 report; estimates and price target also reduced

CLSA analysts cut the rating on Nio (NYSE:NIO) to Outperform on Wednesday citing slower growth documented in the company’s fiscal Q4 2023 report.

The broker also reduced estimates and trimmed the target price from $9.8 to $6.

“NIO’s 4Q23 revenue fell 10.3% QoQ to Rmb17.1bn and its net loss rose 20.8% QoQ to Rmb5.59bn. As NIO did not reach enough scale in 4Q it saw high unit expenses per vehicle, thus resulting in a larger net loss,” the analysts highlighted.

Meanwhile, the carmarker’s vehicle margin saw a slight improvement, up 0.9 percentage points to 11.9%, primarily due to lower material costs and inventory provisions.

Looking forward, CLSA anticipates that NIO's new sub-brand, Alps, set to launch in the third quarter of 2024 with mass deliveries beginning in the fourth quarter of 2023, will offer attractive cost-performance benefits.

The company has also been consistently advancing in building its battery-swapping network, with a goal to have over 3,300 swapping stations by the end of the year, the investment firm added.

“However, seeing slower growth we lower our estimates, switch to a P/S valuation with slow profitability improvement, cut our target price from US$9.80 to US$6.00, and downgrade our rating from BUY to O-PF,” the analysts said.

CLSA reduced its revenue forecasts for 2024 and 2025 by 23% and 34%, respectively, and updated its net loss projections for 2024 and 2025 to Rmb15.7 billion and Rmb13.1 billion, respectively.

The stock was down 1.5% in premarket trading Wednesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.