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EV in showroom by Robert Means by way of Shutterstock
Earlier this month, Morgan Stanley reaffirmed its “Purchase” ranking on Nio (NIO), with the brokerage agency’s $5.90 value goal representing a couple of 30.5% premium to the inventory’s Monday shut. The agency referred to as the Onvo L90 launch a “main catalyst,” with analyst Tim Hsiao writing, “With all of the pessimism within the value, we expect the inventory is sort of a name choice” following sturdy pre-order momentum in Hong Kong.
Morgan Stanley argues that the L90 gives “aggressive specs” at a value level beneath ¥280,000, giving it an edge over each mid-range and premium rivals just like the Li (LI) L9 or AITO M9. With standout options, a spacious inside, and the backing of Nio’s increasing battery-swap and tech infrastructure, the L90 might be a game-changer if Onvo can overcome branding and execution hurdles.
For now, Morgan Stanley’s workforce sees the low value as a buffer which will assist flip investor doubt into contemporary demand.
Based mostly in Shanghai, Nio (NIO) is a number one designer and producer of sensible electrical automobiles (EVs). It gives a spread of electrical SUVs and sedans, together with 5 and six-seater fashions, together with modern energy options like Energy House, Energy Swap, and different charging companies.
With a market cap of $9.16 billion, NIO stumbled early in 2025, falling to a low of $3.02 by April. Nonetheless, stronger deliveries and operational positive aspects have fueled a 32.5% rebound over the previous month.
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When it comes to valuation, NIO is priced at an enterprise worth/gross sales ratio of 1.21, which is a 9% low cost to the sector median of 1.32. This means NIO is priced competitively inside its sector.
The Onvo L90 is NIO’s newly unveiled three-row electrical SUV beneath its mass-market Onvo sub‑model. It launched in July 2025 at a beginning value of RMB 279,900, together with an 85 kWh battery, or RMB 193,900 beneath its Battery‑as‑a‑Service plan. This aggressive pricing undercuts rivals such because the Li Auto L9 (RMB 409,800) and entry fashions just like the Li L6 and XPeng (XPEV) G9.
Regardless of its worth positioning, the L90 boasts premium options: 900V quick charging, an AR head‑up show, adjustable air suspension, an built-in sensible fridge, and Degree 2+ autonomous aids powered by Nvidia’s (NVDA) Orin‑X chip. Its spacious cabin rivals these of upper‑priced six‑seaters just like the AITO M9 and BYD (BYDDY) Denza N9. NIO aimed to manage prices by reusing present platforms and drivetrains with out sacrificing high quality.
Preorders hit 30,000–35,000 inside days, and NIO is dispatching early items to sellers for market suggestions. A five-seat L80 and 400 new gross sales shops are slated for late 2025.
NIO managed a robust supply efficiency in June, handing over 24,925 automobiles, its second-highest month-to-month whole on document. That pushed Q2 deliveries to 72,056 items, up about 26% year-over-year. For the primary half of 2025, the corporate delivered 114,150 automobiles, a 31% leap in comparison with the identical interval final yr.
Financially, the EV firm posted Q1 income of $1.66 billion, representing a 21% year-over-year improve, however simply shy of analyst estimates close to $1.73 billion. Car gross sales remained the first income driver. Regardless of this miss, margins improved, with car gross margin rising to 10.2% from 9.2% a yr in the past. Administration reiterated its purpose of reaching 20% gross margin for the core NIO model and 15% for Onvo by late 2025, with profitability anticipated in This fall.
“We proceed to spend money on multi-brand growth and price efficiencies, and Q2 steerage displays momentum in deliveries,” stated CEO William Li on the earnings name.
Whereas free money move declined, the corporate ended the quarter with round $3.5 billion in money and equivalents, giving it stable monetary flexibility heading into the second half of the yr. With 9 new fashions deliberate for 2025 and a goal of reaching working profitability by year-end, NIO seems to be positioning itself for a robust turnaround.
Most Wall Avenue analysts usually are not as bullish as Morgan Stanley, with the broader consensus ranking on the inventory at “Maintain.”
The truth is, even Hsiao, forward of his bullish endorsement, wrote: “Though we strongly acknowledge Onvo L90’s benefits within the crowded race, beating market expectations isn’t with out challenges contemplating Onvo’s unsatisfactory monitor document of execution and inferior model consciousness, which require further effort for Onvo to leverage L90 and upcoming L80 to beat the deficit.”
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NIO shares are at the moment buying and selling above the typical value goal of $4.37, implying little to no anticipated upside over the following yr. Nonetheless, the 16 analysts in protection have a variety of targets, ranging as excessive as $8.10 – a 79.2% premium from Monday’s shut – to as little as $3, in keeping with the April year-to-date backside.
On the date of publication, Nauman Khan didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and knowledge on this article is solely for informational functions. This text was initially printed on Barchart.com
