NIO, XPeng, and Li Auto Get New Ratings. The Call Is to Buy Them All.

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NIO is essentially selling all the cars it can produce.

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Nicolas Asfouri / FP via Getty Images

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Macquarie analyst Erica Chen launches coverage of three US-listed Chinese electric vehicle makers: NIO,

and lee auto,
Saying that investors should buy the stock.

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Investors seem to be listening. All three stocks were up on Wednesday, though other EV stocks also rose. Shares of NIO (ticker: NIO), XPeng (XPEV) and Li (LI) were up 2.7%, 3.6% and 2.2%, respectively, in early trade. Tesla (TSLA) and Rivian Automotive (RIVN) shares rose between 1% and 1.5%.

It is a positive day for most of the stocks. The S&P 500 and Dow Jones Industrial Average are up 0.4% and 0.3%, respectively.

Chen rated NIO stock to outperform, the equivalent of a Macquarie buy rating, with a target of $37.70 for the price, well above Wednesday morning’s level of $31. He estimates that NIO’s sales will grow at about 50% over the next few years.

Unit sales growth for electric vehicles in China, including plug-in hybrid vehicles, stood at about 180% in 2021 compared to 2020. In NIO, which is selling more or less all its vehicles, the figure was around 109%. Almost all of its vehicles are for the Chinese market, although a small number are sold in Europe.

Chain’s price target represents a gain of around 25% from recent levels, but it is one of the more conservative on Wall Street. About 84% of analysts covering the company rate the stock as buy, while the average buy-rating ratio for shares in the S&P 500 is about 55%. The average price target for NIO shares is around $59, which is slightly less than double its recent price.

Chen also began coverage of XPeng stock with an outperform rating.

XPeng, and its targets for Li Auto, are related to the companies’ Hong Kong listed shares, not New York-listed shares. Chen’s XPeng target is 221 Hong Kong dollars, which means an increase of about 20% for both US and Hong Kong investors.

It’s also a bit more conservative than the forecast for the chain’s Wall Street peers. The average call on XPeng’s US-listed stock price is about $64 per share, meaning a gain of about 38% from recent levels.

XPeng is just as popular as NIO, with a buy rating from 85% of analysts covering the company.

Chen’s price target for Lee is HK$151 per share, meaning a gain of about 28% for US or Hong Kong investors. The average US-based target price for Lee stock is around $46.50, which points to a 50% gain from recent levels.

Lee is the most popular of the three among analysts. With the chain’s new buy rating, it now rates roughly 91% of analysts as equal to buy.

Still, investors can’t really go wrong with any of the three stocks, depending on the analyst’s price target and rating.

Write to Al Root at [email protected]


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