TLDR
- Nomura shifted NIO to Buy from Neutral, setting a $6.60 price target that suggests roughly 34% upside potential
- Macquarie increased its target to $6.50 while maintaining Outperform following fourth-quarter 2025 earnings
- Fourth-quarter revenue surged 76% compared to last year and 59% versus the previous quarter, reaching RMB34.7 billion
- Vehicle gross margin expanded to 18.1% in Q4 from 13.1% in the year-ago period
- Company forecasts Q1 2026 deliveries between 80,000 and 83,000 vehicles, with revenue outlook exceeding analyst expectations
The Chinese electric vehicle manufacturer has experienced a whirlwind week. Following the release of impressive fourth-quarter 2025 financial results, Nio found itself on the receiving end of multiple analyst upgrades and increased price targets from prominent Wall Street firms.
The standout metric was impossible to overlook. Fourth-quarter revenue reached RMB34.7 billion, representing a 76% increase year-over-year and a 59% jump sequentially. Such robust expansion typically captures market attention.
Nomura made the boldest move, elevating NIO from Neutral to Buy. Though the brokerage lowered its price target to $6.60 from a prior $8.40, this still represented approximately 34% upside potential from the stock’s trading level near $4.94.
The investment firm highlighted two consecutive quarters of operational enhancement, emphasizing increased deliveries and improved expense management as catalysts for stronger profitability. Nomura now anticipates NIO will achieve non-GAAP operating profit breakeven during 2026.
Despite reducing its delivery projections for 2026 and 2027 — acknowledging intensifying EV sector competition — Nomura still forecasts vehicle deliveries will expand at roughly 25% annually through 2028. Revenue is anticipated to grow approximately 21% throughout that timeframe.
Gross margin projections for 2026 and 2027 received upward revisions, while operating margin forecasts were boosted by over 3 percentage points for both years. This represents a substantial revision in the firm’s assessment of the company’s cost dynamics.
Margin Improvement Drives Analyst Optimism
Macquarie likewise increased its price target, advancing to $6.50 from $6.10, while maintaining its Outperform rating. The brokerage highlighted vehicle margin enhancement as the primary narrative.
Vehicle margin reached 18.1% in Q4 2025, jumping significantly from 13.1% during the comparable period last year. The refreshed ES8 model was identified as a major contributor to that improvement. Additional sales margin widened to 11.9% from merely 1.1% in Q4 2024.
NIO also reduced R&D expenditures through workforce optimization and intends to maintain quarterly R&D costs between RMB2.0 billion and RMB2.5 billion. The automaker produced positive operating cash flow during the quarter, which Macquarie indicated reduces future capital-raising requirements.
Macquarie did lower its fiscal 2026 volume projection by 8%, acknowledging weaker near-term demand and intensifying competition in the EV SUV category from Li Auto, XPeng, Xiaomi, and Seres. However, it narrowed its 2026 net loss forecast to RMB1.8 billion from RMB4.5 billion, reflecting reduced operating expenses and an improved vehicle portfolio.
Other Brokerages Weigh In
BofA Securities lifted its price target to $6.70 while maintaining a Neutral rating, observing Q4 results essentially aligned with projections. Morgan Stanley reaffirmed its Overweight rating with a $7.00 price target following optimistic growth commentary from NIO’s founder regarding future delivery volumes.
For the first quarter of 2026, NIO projects deliveries between 80,000 and 83,000 vehicles. While the midpoint sits approximately 8% below Bloomberg consensus, it exceeds Macquarie’s forecast by 2%. Revenue guidance spanning RMB24.5 billion to RMB25.2 billion surpassed both Macquarie’s projection and broader analyst consensus.
The company has three new mid- to large-size SUVs under development, with two models scheduled to debut in Q2 2026.
As of Wednesday’s trading session, the stock had appreciated 17.77% over the preceding week, bringing its market capitalization to $14.41 billion.
