Shares of Nio (NYSE:NIO) are in the green today following several positive catalysts. First, China has announced it will ease its coronavirus restrictions in some areas as new cases of the disease tallied in at the lowest rate in nearly three months. Furthermore, Shanghai announced it will end lockdown efforts in areas with low transmission risk. These residents will be allowed to freely leave and enter their houses starting this Wednesday. Taxis and buses will also be allowed in low-risk areas.
On top of that, China released its Purchasing Mangers’ Index for May. The figure came in at 49.6, beating expectations of 48.5 and April’s reading of 47.4. However, the figure is still below 50, which is the line in the sand between contraction and expansion.
Meanwhile, Morgan Stanley’s Tim Hsiao maintained his “overweight” rating and price target of $34 for NIO stock. Let’s get into the details.
NIO Stock: Morgan Stanley Reiterates $34 Price Target
Hsiao stated, “We believe the share price will rise in absolute terms over the next 15 days.” The analyst also mentioned the price of NIO stock has declined in recent months due to lockdowns in Shanghai. The city accounted for more than 15% of the electric vehicle (EV) company’s sales last year.
Hsiao added the lockdown has hurt Nio’s new product launches and manufacturing ramp. However, with gradual reopening and EV subsidies from the Chinese government, he believes the company is primed to resume its sales momentum in the coming months. At current prices, Hsiao’s price target of $34 implies upside of about 100%.
Who Is Betting Big on Nio?
Tracking institutional ownership is important, as these large funds provide liquidity and price support for stocks. During the first quarter, 490 funds reported owning Nio, a decrease of 91 funds from the prior quarter.
Meanwhile, the institutional put/call ratio came in at a high 1.49. This signifies that more funds own put options against the company than call options. While this points to a more bearish statistic, the put/call ratio fell from 1.98 during the prior quarter. With that in mind, let’s take a look at the five largest shareholders:
- OriginalWish: 174.46 million shares. OriginalWish’s position is only accurate as of Q4 2020.
- Tencent Holdings (OTCMKTS:TCEHY): 164.24 million shares. Tencent’s position is only accurate as of Q1 of 2021.
- Baillie Gifford: 88.75 million shares.
- BlackRock (NYSE:BLK): 64.58 million shares.
- Vanguard: 49.06 million shares.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
