Shares of Nio Inc. (NIO) took a 6.8% dive in premarket trading Friday, after Goldman Sachs analyst Fei Fang turned bearish on the China-based electric vehicle maker, citing valuation concerns. He cut his rating to sell, after being at neutral since early October. His stock price target is $7, which is 46% below Thursday's closing price of $12.94. With the stock rising 89% over the past month, Fang wrote in a note to clients that he believes "the current share price reflects over-optimism given no substantial changes to volume/profit expectations ( )." Over the long term, Fang said he believes Nio's investment case depends on the optionality for China's structural auto premiumization and EV adoption, combined with the scarcity of being China's first home-grown high-end passenger vehicle brand. The stock has more than tripled (up 222%) year to date through Thursday, while U.S.-based rival Tesla Inc. shares (TSLA) have nearly tripled (up 259%) and the S&P 500 has slipped 0.5%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 17, 2020 09:14 ET (13:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.