Wall Street has a new biggest Nio bull as Bank of America doubles price target

Published Wed, Nov 18 202010:33 AM ESTUpdated Wed, Nov 18 202010:54 AM EST

(This story is for CNBC PRO subscribers only.) There's a new biggest Nio bull on the Street. Bank of America more than doubled its price target on U.S.-listed shares of the China-based electric vehicle maker — from $23 to a Street high of $54.70 — on Wednesday based on the company's potential market share gain, as well as its growth in overseas markets. Deutsche Bank and JPMorgan also hiked their target on the stock on Wednesday, both going to $50 from prior targets of $34 and $46, respectively. Shares of Nio have gained 1,059% this year through Tuesday's close amid widespread investor interest in electric vehicles, but shares declined more than 6% on Wednesday following the company's third quarter earnings results. Nio reported a smaller-than-expected bottom line loss, and said that revenue rose 146% year over year to 4.52 billion yuan, which is equivalent to $666.6 million, the company said. Third quarter deliveries rose 154.3% year over year to 12,206 vehicles. Bank of America analyst Ming Hsun Lee raised his 2020, 2021, 2022 and 2023 sales volume forecast by 8%, 30%, 37% and 15%, respectively, putting his targets ahead of consensus estimates due to his "more positive view on Nio's strategies." "Through its focus on user experience enhancement [autonomous driving, battery swap, and Battery-as-a-Service (BaaS) model], it will gain share faster," he said in a note to clients. Lee also pointed to "potential overseas contribution starting from 2022," as well as the company's plan to sell vehicles to Mobileye for a robotaxi fleet in China beginning in 2022. Lee believes Nio as well as fellow China-based electric vehicle company XPeng will both grow faster than Tesla in the coming years thanks in part to more new product launches. "We now project NIO/XPeng's FCF will turn positive in 2022/2023, which would be 8 years/9 years after they were founded. This is faster than TSLA," Lee said. Given the record run for Nio and the electric vehicle space more broadly this year, some have cited concerns over stretched valuations. But Deutsche Bank, which has a buy rating on Nio, said the valuation is justified. "We believe NIO will continue to take share in the premium segment from traditional ICE incumbents, leveraging its aspirational brand and innovative/nimble business model ... ultimately emerging a major winner in the China auto market by the middle of the decade," analyst Edison Yu said in a note to clients. "This sets up NIO to be a must-own stock for growth-oriented and ESG investors, in our view," he added. All three firms have buy-equivalent ratings on Nio. - CNBC's Michael Bloom contributed reporting.

Beijing auto show in 2020

Evelyn Cheng | CNBC

(This story is for CNBC PRO subscribers only.)

There's a new biggest Nio bull on the Street.

Bank of America more than doubled its price target on U.S.-listed shares of the China-based electric vehicle maker — from $23 to a Street high of $54.70 — on Wednesday based on the company's potential market share gain, as well as its growth in overseas markets.

Deutsche Bank and JPMorgan also hiked their target on the stock on Wednesday, both going to $50 from prior targets of $34 and $46, respectively.