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Nomura believes that improving financial performance and a better shipment outlook suggest that Nio is entering a healthier business cycle. The bank upgraded the Chinese electric vehicle manufacturer to a buy rating from neutral, although analyst Joel Ying lowered his price target to $6.60 from $8.40. Shares of Nio have risen 12% this year, and are up 9% over the past 12 months. Ying’s revised price forecast implies additional upside of 16% over the coming year. NIO 1Y mountain NIO 1Y chart “Considering its current valuation and encouraging outlook, we believe its valuation looks attractive and hence upgrade NIO to Buy,” the analyst wrote. Ying’s upgrade came after Nio reported fourth-quarter results Tuesday, including revenue growing 65% year over year. Shares of Nio ended Tuesday slightly lower. “This, along with efficient control on [operating expenses], enabled NIO to achieve both positive [operating profit margin] and net profit for the first time in its history,” he added. “Looking into 1Q26E, NIO targets to nearly double shipments growth y-y and maintain vehicle [gross profit margin] at a similar level to 4Q25, thus indicating a good start to 2026E.” Ying forecasts that the compound annual growth rate in Nio’s shipments will reach 25% between 2025 and 2028, with CAGR of 21% in revenue. “With NIO improving — both from a business and financial perspective over the past two quarters — we turn positive on the name, as we believe NIO is finally entering into a healthy business cycle,” he said. “We now expect NIO to reach non-GAAP operating profit breakeven in FY26F.” Additionally, Nomura believes that improved operating efficiency, alongside the introduction of three new SUVs, should further enhance Nio’s business performance. “Considering the three upcoming new models from NIO to be mid- /large-size SUVs (which could have better probability to win orders and should also help its GPM), and if the company can continue to efficiently monitor opex, we anticipate further improvement in its premium market position, alongside financial gains. With two new models to be launched in 2Q26, we see a key catalyst for the name in 2026 is approaching,” he wrote.
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