Nio (NIO) is well poised to gain market share in a growing market for electric vehicles, Morgan Stanley said. Nio stock fell.
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Morgan Stanley hiked its price target on Nio stock to a Street high 80 from 33, indicating another 40% gain from current levels. The firm also has an overweight rating on Nio.
“We believe the wealth created by EV/autonomous driving may surpass prior replacement cycles, driven by a broadening user base and enriched industry value content,” the analysts said.
“The pace of the reshuffle is also accelerating, as seen among the EV and autonomous driving startups in 2020,” they added.
Nio stock has been on a tear as sales soared and its financial condition improved last year. And earlier this month, it unveiled its first electric sedan. The sleek ET7 sedan joined Nio’s lineup of three electric SUVs.
Morgan Stanley also initiated Chinese EV rival Xpeng (XPEV) at overweight with a 70 price target.
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Nio Stock
Shares reversed lower to close down 2.35% at 57.00 on the stock market today. Nio stock is back below a 57.30 cup-shape buy point after bouncing in and out of buy range in recent weeks, according to MarketSmith chart analysis.
But Xpeng fell 4% to 48.18. Among other Chinese EV stocks vying to take share from Tesla (TSLA) on their home turf, Li Auto (LI) added 0.1%.
Meanwhile, Tesla shares fell 5%. Tesla stock, which is on the IBD Leaderboard, is well extended from a 466 buy point as it looks to launch and refresh EV models. Also, Tesla is ramping up in China while eyeing an expansion in Europe.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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