Shares of Nio Inc. (NIO) dropped 4.0% in premarket trading Wednesday, after Goldman Sachs analyst Fei Fang removed the buy rating on the China-based electric vehicle maker, citing valuation concerns, just three weeks after turning bullish ( ). Fang cut the stock's rating to neutral, but raised the price target to $7.00 from $6.40. Fang had upgraded Nio to buy on June 3. The stock, which closed Wednesday at $7.23, or 13% above Fang's previous price target, had run up 54% since the upgrade, while the iShares MSCI China ETF (MCHI) has gained 5.5%, U.S.-based rival Tesla Inc.'s stock (TSLA) has rallied 13.6% and the S&P 500 has tacked on 1.6%. Fang noted that since turning bullish, Nio completed a share offering with net proceeds of $475 million, or 77% more than expected, and data showed that luxury car penetration in China is accelerating ahead of expectations, amid the COVID-19 pandemic. Nio's stock, which closed at a 15-month high on Monday, has run up 79.9% year to date.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
June 24, 2020 09:14 ET (13:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.