Goldman Sachs Upgrades NIO to Buy, $7 PT

Goldman Sachs analyst Tina Hou upgraded NIO (NYSE: NIO) from Neutral to Buy with a price target of $7.

“We upgrade Nio to Buy with 12-month DCF-based target prices of US$7.0/HK$55, implying 46%/42% upside potential.

Among our coverage, we expect Nio to not only deliver one of the fastest volume growth, but also a premium margin profile and strong profit/FCF turn-around in 2026E.

This is supported by the company’s successful turnaround with the launch of new ES8/ES9 together with leading brand power, strengthening its position in the premium NEV market, which we believe creates a higher competitive moat and is more difficult to displace by competitors.

Looking ahead, we believe the company can apply similar strategy to its 5 series and 6 series models and rejuvenate the sales volume of these models in 2027E and beyond, driving continued market share gain.

Despite the domestic NEV market growth of -14% yoy in 1H26, Nio expanded its volume by +67% yoy.

For 2026E full year, we model volume/revenue growth of +43%/+60% yoy, and non-GAAP net profit of Rmb1.6bn (vs. loss of Rmb12.4bn in 2025), we also expect free cash flow to meaningfully improve from Rmb-3.1bn in 2025 to Rmb12.1bn in 2026E.

However, shares are down -6% YTD and -32% from its recent peak in Apr 2026, which is disconnected from the companies improving fundamentals, in our view.

Compared with pure-NEV peers under our coverage, Nio is also trading at a 25%/29% discount on 2026E/27E P/S and 17% discount on 2027E P/E, which we see as attractive given its near term product momentum and strong growth.”

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