MarketMoodz
Nomura Upgrades NIO to Buy on Improving Profitability
Nomura upgraded NIO to Buy from Neutral, citing an improving profitability trajectory. The note frames a potential stock upside and sketches a roadmap of margin expansion, stronger shipments, and several SUV launches through 2026.
Key Takeaways
- Nomura upgrades NIO to Buy from Neutral, citing improving profitability trajectory.
- Price target lowered to $6.60 from $8.40, implying about 16% upside over the next 12 months.
- Q4 2025 revenue growth of 65% Year-over-Year and notes of positive non-GAAP operating margin and net profit (verifiability noted).
- 1Q26E shipments near-doubling YoY with gross margin around 4Q25 levels; shipments CAGR 25% (2025–2028) and revenue CAGR 21% (2025–2028).
- Non-GAAP OPM breakeven projected for FY26F; catalysts include two new SUVs in 2Q26 and three additional mid/large SUVs; ongoing opex discipline supports margin.
People Involved
- Joel Ying Nomura analyst
Entities Involved
- NIO Inc. Chinese electric-vehicle maker
- Nomura Investment bank and equity research firm
MarketMoodz Analysis
For investors, the upgrade signals a potential upside if NIO can sustain profitability improvements, with a clear roadmap of model launches and improving margins. The note lays out a path to non-GAAP breakeven in FY26F and highlights two new SUVs in 2Q26 as near-term catalysts, plus a five-SUV pipeline that could lift shipments and revenue.
Historically, EV margins have been volatile, and NIO’s trajectory will depend on China’s regulatory environment, supply-chain stability, and global demand. The 25% shipments CAGR and 21% revenue CAGR through 2028 imply a meaningful re-rating if gross margins hold near 4Q25 levels, but investors should watch for actual 2025/2026 results and peer-mr margin trends with Tesla, Xpeng, and Li Auto as benchmarks.
Source: Original Article
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