Nomura/Instinet Upgrades NIO to Buy with $6.60 Price Target

Nomura/Instinet analyst Frank Fan upgraded NIO (NYSE: NIO) from Neutral to Buy with a price target of $6.60 (from $8.40).

“With NIO improving — both from a business and financial perspective over the past two quarters — we turn positive on the name, as we believe NIO is finally entering into a healthy business cycle.

Considering the current challenging market environment and NIO’ s business schedule, we cut FY26-27F shipments, but still forecast a 25% shipments CAGR for FY25-28F.

As a result, our revenue growth CAGR is 21% for the same period. On the other hand, we raise FY26F/27F GPM by 0.7pp/ 1.1pp and increase OPM by 3.3pp/3.2pp.

We now expect NIO to reach non-GAAP operating profit breakeven in FY26F. We cut TP to USD6.6, which continues to be based on a DCF methodology. (WACC: 11.4%, beta: 1.0, terminal growth rate: 1.5%; Fig.

6 ). Considering its current valuation and encouraging outlook, we believe its valuation looks attractive and hence upgrade NIO to Buy.

Our TP implies a 2026F P/S of 0.9x; currently trades at 2026F P/S of 0.7x.”

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