Nio Stock Forecast: NIO drops over 3% along with other Chinese stocks

UPDATE: Nio stock is down 3.5% in mid-session on Thursday to $21.10 even while the tech and growth heavy Nasdaq is up 0.5%. Nasdaq's Golden Dragon China Index (HXC), which tracks Chinese stocks on US exchanges, is down more than 4%. This means that the softness in the market for NIO shares is more attributable to the Chinese market than to the US market. Chinese equities have been on a tear now since March 15 when China's government announced an about-face in support of Chinese equities listed on foreign exchanges. These stocks have been rallying ever since, but it appears Thursday has finally called a pause on the euphoria. 

NYSE: NIO worked hard to extend its positive momentum as the stock staged a mid-day rally after falling by nearly 4% in the morning. Shares of Nio added 0.46% and closed the trading session at $21.87. The broader markets cooled off on Wednesday as the 10-year treasury yield and oil prices both surged as investors digested the latest news out of Ukraine. The Dow Jones fell by 449 basis points as the price of oil jumped past $115 per barrel. The S&P 500 dipped by 1.23% and the NASDAQ snapped its recent hot-streak as the tech-heavy index fell by 1.32% during the session. 

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Another day another analyst price target slash for Nio and its competitors. Morgan Stanley analyst Tim Hsiao dropped Nio’s price target from $66.00 per share to $34.00. Hsiao also dropped the price targets for Nio’s domestic rivals as XPeng (NYSE: XPEV) saw its price target fall from $71.00 to $42.00, and Li Auto (NASDAQ: LI) from $49.00 to $41.00. It should be noted that Hsiao remains overweight on all three stocks and that previous price targets were made before the recent correction in the markets. Analysts are just adjusting for the recent price drop, and the overweight rating is what should really matter in the long-run. 

NIO stock price

Nio’s stock has seen a positive shift in sentiment ahead of its quarterly earnings call on Thursday after the close. The stock has gained 22% over the past five sessions and is attempting to recapture previous support levels. While most investors and analysts have factored in a potential decrease in sequential deliveries due to ongoing supply chain issues, the focus for Nio should be on the future growth, of which the thesis remains intact.