JP Morgan updated NIO (NYSE:NIO) to a neutral rating after setting the electric vehicle fleet to the Underweight value. The company pointed to fresh initiatives and events in the near future that may prove to be more constructive to the upside. In particular, NIO (NIO) is seen as benefiting from its battery strategy and the Chinese government’s policies to boost demand for cars.

Analyst Nick Lai said the BAAS (battery as a service) strategy is a welcome move, especially in complex pricing conditions. “By successfully increasing the take-up rate, NIO is effectively expanding its target market and lowering the starting price for the mass BEV segment below PLN 300,000. Rmb for two crucial volume models – ES6 and ET5 (responsible for 75% of sales in 2023,” he added. noted.

Lai also believes that a key event to watch for in the near future will be the soft launch of NIO’s first mass-market product under the new brand, followed by a pricing announcement in the third quarter and shipping after the fourth quarter.

JP Morgan forecasts that monthly sales of NIO (NIO) units will increase from 15,000 to in the second quarter to 23 thousand in the fourth quarter. Gross margin increased to 12% in the fourth quarter. The company has a $5.40 price target for NIO (NIO) based on a blended average of 0.9X FY24 P/S and 0.8X FY24 EV/Sales estimates.

NIO ( NIO ) stock rallied 3.11% in pre-market action to $5.97, compared with a 52-week trading range of $3.61 to $16.18. NIO brief interest (NIO) is 10.1% of the total interest.