NIO Stock Drops on Soft Q3 Forecast and J.P. Morgan Downgrade
TLDR
- NIO stock dropped after Q3 revenue guidance of ~$5 billion missed Wall Street’s $5.3 billion estimate
- Q2 revenue came in at $4.7 billion, up 69% year over year, with break-even adjusted profits
- J.P. Morgan downgraded NIO from Overweight to Neutral and cut its price target from $7.00 to $4.50
- Vehicle gross margin improved to 18.5% in Q2, but cost pressures from batteries and chips are expected to rise
- J.P. Morgan slashed its 2027 adjusted earnings forecast by 52%, now projecting a 975 million yuan net loss
NIO reported Q2 revenue of $4.7 billion, up 69% year over year, with break-even adjusted profits. Wall Street had expected a 4-cent per share loss on $4.8 billion in revenue, so the results came in slightly better than forecast.
Despite the beat, NIO’s ADR fell 6.4% in overseas trading and was down around 1.4% to $4.17 in U.S. markets on Tuesday. The stock was already down 17% this year and 34% over the past 12 months heading into the report.
The main drag was the Q3 outlook. NIO guided for approximately $5 billion in revenue, well below the $5.3 billion analysts were expecting. That gap is what hit the stock.
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