This article first appeared on GuruFocus.
Morgan Stanley is sticking with its bullish call on NIO (NYSE:NIO), reaffirming a Buy rating after analysts met directly with founder William Li and came away more confident about where the company is headed.
In a new note, Morgan Stanley analyst Tim Hsiao reiterated his Overweight rating and kept a $7.00 price target, pointing to clearer execution plans, stronger delivery momentum, and improving economics from upcoming models. China’s EV market remains brutally competitive, but Hsiao said management’s updated strategy now looks more focused than it has in recent quarters.
NIO expects deliveries to grow 40%50% annually over the next 2 years, which would put 2026 volumes between 456,000 and 489,000 vehicles. That growth is expected to be driven by new launches including the ES9, ES7 and Onvo L80. The ES9 stands out as a potential profit engine, with an average selling price above RMB500,000 and estimated profit of more than RMB100,000 per vehicle, positioning it against premium SUVs like the BMW X5 and Mercedes GLE.