STOCKS | BofA Cuts Nio Target Price, Keeps Neutral Rating

Bank of America cut its target price on Nio (09866) to HK$40 from HK$47 in Hong Kong and to $5.2 from $6 in the U.S., while keeping a Neutral rating, according to ETNet. The bank said Nio's second-quarter revenue was broadly in line with market expectations, but gross margin came in slightly below forecasts and non-GAAP net profit missed estimates due to a higher operating expense ratio. Management remained upbeat on demand for the ES8 and ES9 models. It also expects per-vehicle costs to rise by RMB 2,000 to RMB 3,000 in the second half, while aiming to keep automotive gross margin stable. Bank of America cut its 2026-28 sales forecasts for the company by 8% to 12%, lowered gross margin estimates by 0.2 to 0.5 percentage points, and reduced non-GAAP net profit forecasts by 27% to 54%. It said intensifying competition, the end of subsidies and higher raw material costs are pressuring profit margins.