Nio rose Tuesday after Citi upgraded the Chinese EV maker to "buy" from "neutral."- Citi raised its price target to $58.30 from $57.60, implying potential upside of 50%.
- In May, Nio's vehicle delivery was adversely impacted for several days due to a semiconductor supply shortage.
Shares of Nio rose 8.5% to a five-week high Tuesday after Citi upgraded the Chinese car maker to "buy" from "neutral," citing a surge in demand for electric vehicles in China.
Citi lifted its 2021 sales estimate for electric vehicles in the country to an estimated 2.52 million units from 1.79 million units. For 2025, the firm also boosted sales estimates to 7.84 million units from 6.86 million units.
Citi said it expects that the uptick in the second quarter order backlogs will increase Nio's revenue and market share in the second half of 2021.
Citi's new price target of $58.30, raised from $57.60, represents a potential 50% upside from Friday's closing price of $38.62. The bullish new target comes despite a rough year so far in 2021 for the electric vehicle maker, and the industry broadly, as supply chain and manufacturing constraints weigh on car makers' delivery guidance.
"Based on the current production and delivery plan, the company will be able to accelerate the delivery in June to make up for the delays from May," Nio said in a statement Tuesday. "The company maintains and reiterates the delivery guidance of 21,000 to 22,000 vehicles in the second quarter of 2021."