TLDR
- Nomura shifted NIO rating to Buy from Neutral, setting a $6.60 price target representing approximately 34% potential gain
- Macquarie increased its target price to $6.50 from $6.10, keeping Outperform rating following Q4 2025 earnings
- Fourth quarter revenue surged 76% annually and 59% sequentially to reach RMB34.7 billion
- Vehicle gross margin expanded to 18.1% in Q4 from 13.1% in the prior-year period
- Company forecasts Q1 2026 deliveries between 80,000–83,000 vehicles, with revenue outlook exceeding analyst expectations
The past week has been eventful for Nio. Following the release of robust fourth-quarter 2025 financial results, the Chinese electric vehicle manufacturer received favorable analyst upgrades and increased price targets from multiple Wall Street firms.
The standout metric proved difficult to overlook. Fourth quarter revenue reached RMB34.7 billion, representing a 76% increase year-over-year and 59% growth from the third quarter. Such substantial expansion typically captures market attention.
Nomura made the boldest move, elevating NIO from a Neutral stance to Buy. The investment bank established a $6.60 price objective, reduced from its earlier $8.40 forecast, yet still suggesting approximately 34% appreciation potential from the stock’s trading level near $4.94.
The firm highlighted two consecutive quarters of operational enhancement, attributing improved profitability to increased delivery volumes and more disciplined expense management. Nomura anticipates NIO will achieve non-GAAP operating profit breakeven during 2026.
Despite reducing delivery projections for 2026 and 2027 — acknowledging intensifying EV market competition — Nomura maintains expectations for vehicle deliveries to expand at roughly 25% compound annual growth between 2025 and 2028. Revenue is forecast to grow approximately 21% across the same timeframe.
Gross margin projections for 2026 and 2027 received upward revisions, while operating margin estimates were enhanced by over 3 percentage points for both years. This represents a substantial change in the firm’s assessment of the company’s cost efficiency.
Margin Improvement Drives Analyst Optimism
Macquarie similarly boosted its price objective, advancing to $6.50 from $6.10, while maintaining its Outperform designation. The firm emphasized vehicle margin expansion as the central narrative.
Vehicle margin reached 18.1% in Q4 2025, advancing significantly from 13.1% during the comparable period one year prior. The newly launched ES8 model received credit for contributing substantially to that improvement. Other sales margin widened to 11.9% from merely 1.1% in Q4 2024.
NIO additionally reduced R&D expenditures through workforce optimization and intends to maintain quarterly R&D costs within the RMB2.0 billion to RMB2.5 billion band. The company produced positive operating cash flow during the quarter, which Macquarie indicated diminishes the probability of additional capital raises.
Macquarie did reduce its fiscal 2026 volume projection by 8%, referencing subdued near-term demand and escalating competition within 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 mix.
Other Brokerages Weigh In
BofA Securities elevated its price objective to $6.70 while maintaining a Neutral designation, observing that Q4 performance broadly aligned with projections. Morgan Stanley reaffirmed its Overweight stance with a $7.00 price target following optimistic commentary from NIO’s founder regarding anticipated delivery expansion.
For the first quarter of 2026, NIO projects deliveries ranging from 80,000 to 83,000 vehicles. The midpoint falls approximately 8% beneath Bloomberg consensus but stands 2% above Macquarie’s forecast. Revenue guidance spanning RMB24.5 billion to RMB25.2 billion exceeded both Macquarie’s projection and broader analyst consensus.
NIO plans to introduce three new mid- to large-size SUVs, with two models scheduled for launch during Q2 2026.
The stock had appreciated 17.77% over the preceding week through Wednesday’s trading session, commanding a market capitalization of $14.41 billion.
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