NIO Stock Forecast: Nio Inc rebounds but not out of the woods yet

Update: NYSE: NIO staged a decent comeback on Wednesday, tracking the rebound in the broader Wall Street indices. In doing so, Shares of the Chinese electric vehicle (EV) maker Nio closed almost unchanged on the day at $14.64, having hit an eight-day low of $14.09 earlier in the day. Less aggressive Fed’s tightening outlook, revealed by the FOMC May meeting’s minutes, helped the Wall Street turnaround. The early sell-off in NIO was in part due to US President Biden's rollout of the Indo-Pacific Economic Framework (IPEF). Chinese stock investors remain wary that the new framework could cause more division between the US and China on the regulatory front.

NYSE: NIO extended its declines to start the week as the Chinese EV maker lagged the broader markets in a weak session for ADR stocks. On Tuesday, shares of Nio dropped lower by 8.56% and closed the trading day at $14.63. It was the second consecutive drop for Nio following a market reaction to rival XPeng’s (NYSE: XPEV) weak guidance for the rest of 2022. The broader markets were in flux again as the three major indices saw mixed results. The Dow Jones rose by 48 basis points, the S&P 500 fell by 0.81%, and the NASDAQ tanked by 2.35% after a warning from social media company Snap (NYSE: SNAP) dragged down the tech sector.

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In Tokyo, President Biden revealed a proposed new Indo-Pacific Economic Framework or IPEF that many believe could work to challenge China’s dominance in the region. Biden’s IPEF would be seeking to establish international rules between the major economies in the region which include Japan, Australia, and South Korea. Given the ongoing geopolitical tensions between the two superpowers, it is clear why investors were once again shying away from Chinese ADR stocks given the current market environment. 

NIO stock price

Despite all of the ongoing headwinds for Nio, Wall Street analysts remain overwhelmingly bullish on the company’s stock. On Monday, Mizuho analyst Vijay Rakesh reiterated his buy rating for the stock and maintained his price target of $60 per share. This price target provides a staggering 275% upside for the next twelve months. According to TipRanks, 14 of 15 analysts have a buy rating for Nio with a median price target of $40.61.

Previous updates

Update: NYSE:NIO ended Wednesday at $14.64 per share, pretty much unchanged after plummeting on Tuesday, and despite the better tone of Wall Street. US indexes spent the day seesawing around their opening levels but edged higher after the US Federal Reserve released the Minutes of its May meeting. The document showed that most policymakers agree with two more 50 bps hikes, somehow hinting at a pause afterwards. The Dow Jones Industrial Average ended up gaining 191 points, while the S&P 500 added 0.74%. The Nasdaq Composite was the best performer, finishing the session up 1.51%. The positive mood could be short-lived, as investors are still cautious amid signs of slowing economic growth and lingering inflation. 

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