Goldman upgraded NIO from Neutral to Buy with an unchanged price target of $56, corresponding to a 65 percent upside.
(Photo source: CnEVPost)
Despite a sharp pullback in its stock price this year, this does not affect analysts' bullish outlook on NIO.
Goldman Sachs analyst Fei Fang upgraded his rating on NIO from Neutral to Buy in his latest report, maintaining a price target of $56, corresponding to a 65 percent upside.
He raised NIO's revenue forecast for 2021-23 by 2 percent and 7 percent, respectively, to reflect the differentiated ET7 launch, but maintains profit expectations and valuation.
He noted that NIO shares have fallen 34 percent since July 1, partly related to the company itself and partly dragged down by the macro environment.
The analyst believes NIO is positioning itself as a strategic product with the launch of the company's fourth passenger car and first sedan, the ET7, at NIO Day in January 2021.
He said the ET7's price makes it the most expensive model ever launched by a domestic manufacturer, reinforcing NIO's brand value in the premium market.
NIO jumped more than 5 percent to $35.46 in pre-market trading on Thursday.
In fact, Goldman Sachs is not the only bank that is bullish on NIO ET7.
In a report in early June, top Chinese investment bank CICC said the NIO ET7 is scheduled to go on sale in the first quarter of 2022, when it will remain the most advanced vehicle in the global automotive market in terms of smart hardware configuration.
The car comes standard with NAD (NIO Autonomous Driving), which can gradually realize point-to-point autonomous driving in high-speed, urban, parking and power-up scenarios, the team noted.
At the perception level, ET7's Aquila super-sensing system is equipped with 33 high-performance perception hardware, and is industry-leading in carrying LIDAR. At the computational level, its supercomputing platform Adam is equipped with four NVIDIA Orin chips and has an arithmetic power of 1,016Tops.
"We believe that with the hardware configuration and the company's full-stack R&D capabilities, NIO is on track to reach industry leadership in autonomous driving," CICC said.
At NIO's annual event NIO Day on January 9 this year, William Li, founder, chairman and CEO of NIO, unveiled the NIO ET7 sedan and said the model is available for pre-order.
Previously the company's models were all Chinese favorite SUVs, including the ES8, ES6 and EC6.
NIO has never disclosed the number of orders for the ET7, but has said several times that it has exceeded expectations with more orders than any previous vehicle.
In early July, CICC said in a research note that the ET7 is expected to contribute 70,000 units to NIO's sales next year, bringing the company's total sales to 170,000 units.
CICC then raised its sales forecast for NIO in 2021 by 5 percent to 98,000 units.
If that forecast comes true, it means NIO will deliver an average of 5,830 ET7 units per month next year, which is expected to make that model the mainstay of NIO.
For comparison, NIO delivered a record 10,628 vehicles in September, including 1,978 ES8s, 5,260 ES6s and 3,390 EC6s.
NIO first revealed the ET7's interior at the Shanghai Auto Show in April, when Li Xiang, founder and CEO of the company's local counterpart Li Auto, said on Weibo that the two best electric cars at this year's show were the NIO ET7 and Zeekr 001.
The ET7's design is mature and confident, while the Zeekr 001 offers great value for money, Li said. Zeekr is Geely's premium electric car brand.
While praising the two EVs, Li said he was disappointed with traditional luxury car brands Mercedes-Benz's EQS and BMW's iX series of new electric flagship cars, which "have a lot of strange design and feature points that are just incomprehensible."