NIO had a very strong finish to the year.
The Chinese electric vehicle maker delivered 7,007 vehicles in December. That up from 5,291 in November and up 121% compared with December 2019, according to the company.
It can be a little hard to get a consensus delivery number for NIO (ticker: NIO) and other Chinese EV producers. Most of the analysts are based in Asia and aggregating a consensus is difficult. Tesla (TSLA), for instance, delivered more than 180,000 vehicles in the fourth quarter which was better than the roughly 176,000 analysts projected.
Still, the NIO number looks very strong, even without a true analyst consensus to compare it too. The 5,000-plus delivery figure in November was considered by analysts to be strong.
Despite the strong November number, NIO stock dropped more than 10% the day it was released. It can be hard to call the stock price reaction for highflying shares. NIO stock, after all, rose more than 1,100% in 2020.
Stocks, often times, drop on good news in bull markets. Then, often times, investors buy the dip. EV stocks are definitely in a bull market. Tesla rose about 740% in 2020 and is now the world’s most valuable car company by a wide margin.
The gains have left the sector expensive and Barron’s recently wrote that Chinese EV stocks were too pricey for us. That article appeared in mid-December and the Chinese EV stocks, on average, trade about where they did back then.
Analysts, for the most part, disagree with Barron’s. More than 60% of analysts rate the three Chinese EV stocks—NIO, Li Auto (LI) and XPeng (XPEV)—Buy. The average Buy rating ratio for stocks in the Dow Jones Industrial Average is about 57%.
For NIO, 65% of analysts covering the company rate share Buy. Although the average analyst price target is about $46 a share. NIO stock closed 2020 at $48.74.
Monday should be an interesting day. Investors have Tesla’s recent Model Y pricing in China to deal with. A Model Y is priced below a NIO EC6. That might be a concern, but the delivery numbers are good.
Looking beyond Monday, NIO will unveil a new sedan around January 9.
There is no shortage of data points for EV investors to digest early in the new year.
Write to Al Root at [email protected]
