Nio Shares Drop After J.P. Morgan Downgrade
Shares of Nio (NYSE:NIO) fell by 4% following a downgrade from J.P. Morgan to Neutral from Overweight, along with a reduced price target to $4.50 from $7. The move was attributed to weak demand in China's electric vehicle market and intensifying competition. XPeng (XPEV) and Li Auto (LI), Nio’s peers, also declined by 1% each. J.P. Morgan cut its revenue and earnings forecasts for Nio due to expected flat or declining passenger-vehicle demand in China through 2027. The firm now anticipates a significant net loss for the company in both 2026 and 2027, citing rising costs from batteries and chips as key challenges. Despite these concerns, J.P. Morgan acknowledged Nio's strong Q2 performance with an impressive vehicle gross margin of 18.5%. However, management warned that additional cost pressures are expected in the second half.
