Nio (NYSE:NIO), a Chinese EV firm, will disclose profits next Wednesday.
A Deutsche Bank analyst lowered their price target to $39 from $45 due to weaker sales projections. The analyst anticipates Nio to publish a “largely in-line quarter” as investors focus on the 2H outlook after Xpeng’s poor guidance last week (NYSE:XPEV).
“By the time NIO reports, management will only need to guide for 1 month in 3Q (DBe at 30,500 units), and our view is investors are generally already prepared for weaker near-term sales,” he wrote to clients in a research note.
The analyst feels “3Q/4Q consensus projections need to fall down,” but this quarter may be the “final reset before the product supercycle takes full stride.”
He noted that management has confirmed a separate NIO Day in Europe next quarter, which might boost sentiment, he noted.
Deutsche Bank still recommends NIO stock as a top China EV option because “the company’s initiatives surrounding battery swapping, user experience, and internal battery cell research are underestimated.”
Nio shares are down 2% in premarket.