NIO Shares Fall on Barclays Downgrades

NIO (NYSE:NIO) fell nearly 2% pre-market today after Barclays analysts downgraded the company to Underweight from Equalweight, reducing the price target to $4.00 from $5.00.

The analysts noted NIO's March deliveries were weaker than expected, aligning with revised but not original guidance, highlighting concerns over sales momentum for its 2024 models.

With few new launches expected for the rest of the year, there are significant concerns about NIO's ability to meet consensus estimates. Additionally, the increasingly competitive EV market in China, especially in the higher-end SUVs and sedans segment where NIO operates, poses further challenges.

Competitors like Huawei, BYD’s Danza brand, and recently Xiaomi have introduced compelling models, intensifying the competition. Adjustments have been made to NIO's revenue estimates for 2024 and 2025, reflecting these challenges while maintaining vehicle margin estimates. Despite slight reductions in operational expenses to mitigate bottom line losses, the price target has been lowered due to weaker March deliveries and mounting competition.