Nio Stock Brushes Off Bull Note, Product Launch

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J.P. Morgan upgraded and hiked its price target on Nio stock

After opening at $6.01, shares of China-based electric vehicle (EV) maker Nio Inc (NYSE:NIO) are 5.8% lower at $5.45 at last glance, brushing off a bull note at J.P. Morgan Securities. The analyst upgraded the EV stock to “neutral” from “underweight” and raised its price target to $5.40 from $4.80, citing the Chinese government’s stimulus policy and Nio’s newest battery as service (Baas) strategy as potential tailwinds.

Also helping the stock move higher today, Nio today launched the L60 SUV in its Onvo unit. Onvo is Nio’s lower-priced brand that will compete with the world’s best-selling EV, Tesla’s (TSLA) model Y.

Over the last month, Nio stock tacked on 46.3%. Despite this recent outperformance, analysts are still on the fence. Of the 14 covering brokerages, 10 rate NIO a “hold” or worse. This leaves the equity open to more upgrades. 

Options traders are racing towards the equity following the updates. So far, 105,000 calls and 33,000 puts have exchanged hands, options volume that is triple the average intraday amount. Most popular by far is the May 6 call.

Meanwhile, short sellers are building their positions. Short interest is up 3.6% in the most recent reporting period, and currently accounts for 10% of the stock’s available float.

Nio stock recently bounced from roughly four-year lows at the $3.60 mark, but its 120-day moving average is keeping a lid on today’s gains. Despite recent positive price action, NIO still sports a 36.8% year-to-date deficit, which could mean now is a good entry point for prospective bettors.