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Morgan Stanley’s renewed bullish stance on NIO (NYSE:NIO) follows meetings with company leadership, where management outlined upcoming premium and mass-market models, projected 40% to 50% annual delivery growth, and highlighted European expansion and new technology partnerships.
See our latest analysis for NIO.
Despite the fresh optimism around new models and partnerships, NIO’s recent trading has been weak, with a 30 day share price return of a 14.04% decline and a 90 day share price return of a 34.52% decline. The 1 year total shareholder return of 8.77% contrasts with much deeper 3 and 5 year total shareholder return losses, suggesting near term momentum has been fading even as the long term story remains heavily tested.
If you are tracking how EV names like NIO fit into the broader auto space, it could be worth scanning other auto manufacturers that might suit your watchlist next.
With NIO trading at $4.59 and sitting at a roughly 45% discount to the average analyst price target, plus only a modest intrinsic value discount, you have to ask yourself: is this a genuine mispricing, or is the market already baking in future growth?
The most followed narrative pegs NIO’s fair value at about $6.75 per share, compared with the latest close at $4.59, framing a material valuation gap.
Analysts have trimmed their price target on NIO modestly, reflecting a slightly lower fair value estimate of about $6.75 per share, down from roughly $6.83. They factor in weaker near term volume guidance, softer 2026 demand expectations, more intense competition, and a sharply higher implied future P E multiple amid pressured margin assumptions.
Curious how a lower growth and margin outlook can still support a higher valuation than today’s price? The narrative leans on faster revenue expansion, rising earnings and a richer future earnings multiple. Want to see which assumptions really carry that fair value story?
Result: Fair Value of $6.75 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, you still need to weigh the risk that persistent net losses and intense EV competition in China could pressure margins and challenge those long range valuation assumptions.
Find out about the key risks to this NIO narrative.
While the narrative leans on a fair value of about $6.75 per share, NIO currently trades on a P/S of 1.1x versus a fair ratio of 1x. It also sits above the US Auto industry average of 0.7x but below peer levels of 2.2x. That mix hints at both valuation risk and potential upside, so which side matters more to you?
See what the numbers say about this price — find out in our valuation breakdown.
If you are not fully on board with this view or prefer to lean on your own judgement, you can stress test the numbers and build a custom thesis in just a few minutes: Do it your way.
A great starting point for your NIO research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
If NIO has sharpened your thinking, do not stop here. Broaden your watchlist with fresh ideas that match your style and keep you one step ahead.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NIO.
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