Nio’s Stock Downgraded By JPMorgan Due To Overly Optimistic Expectations

The company aims to build an autonomous driving platform that will enable cars with no driver input, so you don’t need a smartphone or key fob – just enter your destination into their app! They previously founded Tencent’s gaming division Hunan Broadcasting System (HBS). Market closely over the past few years as it has seen rapid growth. NIO has products ready for launch and plans for more coming through 2022 and 2025.

During Thursday’s pre-market trading session, the stock fell a little more than 1%. Analyst Nick Lai downgraded Nio’s stock from overweight to neutral and said it will become more and more challenging for the electric vehicle maker to deliver on its high expectations as time goes on. Due to a contraction in vehicle margins, according to him, the firm’s fourth-quarter results were a miss. The stock market rally fell sharply https://g-markets.net/ last week, but rebounded to close with solid gains, a shakeout that could set the stage for a stronger advance. Nio’s recent earnings report missed estimates, with the company reporting a net loss of 1.39 billion yuan ($212 million) for the fourth quarter of 2020. While the loss was smaller than in the previous year’s fourth quarter, it was wider than analysts had expected, leading to a sell-off in Nio’s stock.

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LI stock rose modestly before the open, signaling a move above all its moving averages. First Republic is the second-largest U.S. bank failure ever, surpassing Silicon Valley Bank and Signature Bank. Only Washington Mutual’s collapse during the financial crisis was larger. The Federal Deposit Insurance Corp. will share losses on First Republic’s loans and will give $50 billion in financing to JPMorgan. The agency estimated that its insurance fund would lose $13 billion in the deal.

• However, it has experienced a significant drop of 53.7% over the last year.
• The S&P 500 and Dow Jones are near that level, undercutting their 21-day lines by midweek.
• Another bullish case for NIO is that the delisting worry of Chinese stocks would soon be over following the US auditing of these companies.
• Worse, the First Trust Nasdaq-100 Equal Weighted Index ETF (QQEW) and Invesco S&P 500 Equal Weight ETF (RSP) tumbled below their 50-day lines on Tuesday.

This is down from the 4.5 time multiple that was applied in the past, the analyst said. The analyst noted that the company will begin deliveries of its ET7 sedan by late first quarter and will follow it up with the ET5 mid-size sedan and the ES7 SUV. The Financial Select SPDR ETF (XLF) dipped 0.15%, but rebounded to close just below its 50-day. The SPDR S&P Regional Banking ETF (KRE) fell 0.6%, but slashed losses after hitting its worst levels since late 2020. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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The market rally remains “under pressure.”  Investors still need to see a little more market strength and a lot more buying opportunities. Worse-than-expected overall auto market sales/EV demand; and worse-than-expected competition from rivals with products at similar price points. JPMorgan Chase’s holdings in NIO increased by about 6 million shares, or 378 percent, compared with about 1.6 million shares at the end of the third quarter last year. JPMorgan Chase increased its holdings in NIO by about 6 million shares, or 378 percent, compared with the end of the third quarter. Given NIO’s current stage in the business life cycle, it was looking for prudent, market-competitive return opportunities for some of its domestically generated cash. Yet meeting its newly broadened appetite for returns proved challenging at a time of ultra-low rates.

Initially, megacaps such as Meta Platforms (META) and Microsoft (MSFT) led the comeback, but breadth improved late in the week. JP Morgan analysts led by Nick Lai raised their price target on NIO sharply to $40 in a report released on Wednesday. To achieve these at the same time as new AMP rules were about to go into effect required proactivity. By using the combination, NIO maximised its cash investment return opportunities.

Additionally, a strong backlog of orders is also expected to continue acting as a tailwind for the stock. As an illustration of the strong product demand, the wait time for the newly launched EC6 crossover is currently 8 weeks. Finally, the Wall Street giant expects NIO to debut a new sedan at the NIO Day, currently scheduled for December 2020. This will expand NIO’s product portfolio, currently consisting of the ES6 and ES8 SUVs as well as the EC6 crossover. As with any investment decision, it is important for investors to do their own research and make informed decisions based on their own risk tolerance and financial goals. While Nio may still have strong long-term prospects, JPMorgan’s warning highlights the need for caution and careful analysis before making any investment decisions in the electric vehicle maker sector.

NIO stock falls after ‘tactical’ downgrade by J.P. Morgan on margin concerns

The firm currently holds call options representing 0 of underlying shares
valued at $0 USD
and put options representing 160,000 of underlying shares
valued at $1,682,000 USD
. Looking at the delivery report of NIO, there was a decline in October when compared with the previous months. October figures were about 10,000 while September numbers stood at 10,873 vehicles. If the two temporarily shut-down plants do not resume operation, we can expect a further decline in these numbers.

• The company designs, jointly manufactures and sells smart and connected premium electric vehicles, driving innovations in next generation technologies in connectivity, autonomous driving and artificial intelligence.
• Among growth ETFs, the Innovator IBD 50 ETF (FFTY) sank 3.6% last week, with several components suffering huge earnings losses.
• Li Auto sales surged to a fresh record of 25,681 hybrid SUVs, up 23% vs. March and 516% vs. a year earlier.
• JPMorgan Chase also reduced its holdings in Li Auto by 13.5 percent in the fourth quarter, from about 2.3 million shares to 1.98 million shares.

Like many start-ups, NIO has faced cash investment challenges, evolving as it has moved through different phases of its business life cycle. It has experienced rapid growth, combined with a torrent of investment capital, which created vast cash management challenges. NIO has a high cash burn rate due to the high cost of research and development.

JP Morgan Chase adds 1.4M NIO shares increasing its holdings by 33% in Q2

NIO’s treasurers in China can quickly manage settlement of capital raised regardless of time zones or business hours. The financial institution also helped NIO’s treasury team enhance its governance, ensuring its liquidity management fulfilled both its own business objectives and US share listing requirements. The company’s sales network is also expanding rapidly, and at the end of Q2 this year XPeng reported having 388 stores in 142 cities across China. To support its vehicles, XPeng has a network of 977 charging stations, a total that included 793 self-operated superchargers.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 4.5% last week and ARK Genomics ETF (ARKG) 5.3%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs, with Cathie Wood adding more TSLA shares in the past few weeks. Also, Arista Networks (ANET) is on tap to report first-quarter earnings Monday night. ANET stock, a big supplier for Meta Platforms and Microsoft, found support at its 50-day line this past week. China EV startups Li Auto (LI), Nio (NIO) and XPeng (XPEV) reported April deliveries early Monday.

Based on “earnings visibility and balance sheet strength” and his view that “PV sales will return to seasonality in 1Q23,” Lai sees “positive risk-reward” for two Chinese EV stocks in particular. We ran them both through the TipRanks database to see what the rest of the Street thinks. In the third quarter of 2020, when the stock was in a big run towards the all-time high of $66.99 per share reached in January 2021, the firm held over 10 million shares in the EV maker. Although, JP Morgan Chase & Co. sold nearly 80% of its position ending the year with 2,743,291 shares.

If the indexes whipsaw with weak breadth, you’ll be glad you’re mostly in cash. Nio Inc, a leading Chinese electric vehicle manufacturer, on Monday June 12th received 6 analyst research reports resulting in changes to the coverage in the stock forecast. These rating changes indicate varying perspectives on the future performance of the company’s stock.

PNC Financial (PNC) and Citizens Financial Group (CFG) also reportedly bid for First Republic. Dow Jones futures were little changed Monday morning, along with S&P 500 futures and Nasdaq futures. JPMorgan Chase (JPM) will acquire the bulk of First Republic Bank, as part of a quick government seizure and sale. (2) The extension of the NEV subsidy program toward 2022, where the battery swap business model is covered by the government’s subsidy scheme, is encouraging.

JPMorgan Chase & Co filed Thursday a 13F-HR reporting the ownership of 5,628,106 shares in the EV maker NIO as of the end of Q representing an increase of 33.12% from the first quarter of the year. Following today’s downgrade, shares of NIO stock are down nearly 2%. The EV company’s stock is also down 10% since the start of the year. Trading is also somewhat light, with about 25 million shares on the move. Jpmorgan Chase & Co
has a history of taking positions in derivatives of the underlying security (NIO)
in the form of stock options.