Macquarie Raises NIO Price Target to $6.50
Macquarie analyst Eugene Hsiao raised the price target on NIO (NYSE: NIO) to $6.50 (from $6.10) while maintaining a Outperform rating.
“NIO posted 4Q25 results and held its earnings call post-close on Tuesday. • What we liked: 1) Vehicle margin rose to 18.1% (vs 13.1% 4Q24) as the new ES8 helped lift profitability.
2) R&D tightened as NIO reduced staff and looks to keep R&D spend at Rmb2.0-2.5bn per quarter. 3) Positive operating cash flow is helping mitigate future fundraising needs.
4) ‘Other sales’ margin of 11.9% (vs 1.1% 4Q24) should continue to rise. • What we didn’t like: 1) There were few specifics on upcoming margin pressures (e.g., battery vs. memory prices).
2) Low SG&A in 4Q is likely a one-off due to a lack of model launches, though 2Q is likely to ramp as the ES9/L80 models; management’s goal for SG&A ratio is ~10% of sales. • 1Q guidance: 80-83k unit deliveries (midpoint is 8% below Bloomberg consensus but 2% above MQe) imply March sales of 33.5k, above the 20-25k trend in Jan/Feb.
1Q revenue guide Rmb24.5-25.2bn (midpoint above both MQe and consensus); vehicle margin target to be flat QoQ.
MQ view: Management is sticking to 40-50% YoY FY26E volume growth target despite a tough Jan/Feb on a strong demand outlook for five midsize/large SUV models.
We are more cautious given ample new competition in NEV SUV in 2026 from the likes of Li Auto, XPeng, Xiaomi, and Seres.
NIO acknowledged cost pressures into 1Q/2Q, but believes margin accretive premium SUV launches can help mitigate this impact.
Earnings changes: We trim FY26E volume 8% on weak 1Q demand and low visibility into 2Q-4Q from competition.
FY26E estimated net loss narrows to -Rmb1.8bn (was -Rmb4.5bn) on lower opex spend and vehicle mix.
Valuation: We raise our TPs by 9%/7% to HK$51.00/US$6.50, from HK $47.00/US$6.10, as we lift our target FY26E P/S multiple to 0.9x (was 0.8x), which is similar to that of EV peers.
Catalysts: Continued backlog conversion of ES8, better-than-expected 1Q margins, strong pre-orders for ES9/L8.”
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