Morgan Stanley is standing by its bullish stance on Nio , even after the Chinese electrical carmaker’s large rally over the previous two months. Shares of Nio have surged in current weeks and rallied additional after the corporate unveiled its ES8 SUV on Aug. 21. The mannequin, which clocks in at 308,800 yuan, or $43,000, below a battery subscription plan, is rather more reasonably priced than Nio’s premium SUVs, which usually come in between 338,000 yuan and 768,000 yuan. Deliveries for the brand new car will start in late September. NIO YTD mountain NIO YTD chart But regardless of Nio’s surge, Morgan Stanley analyst Tim Hsiao caught by his overweight rating on the inventory. The analyst’s value goal of $6.50 per share is lower than 3% above the inventory’s Friday shut. “NIO’s share price has risen 90%+ from the trough in June (vs. HSI +9%), reaching our price target of US$6.5/HK$50.7,” Hsiao wrote in the Monday notice. “The stock upward movement has been self-reinforcing as investors believe NIO’s share price performance is correlated to capital markets’ willingness to finance its operation and strategic ambitions, which is also linked to its operational value and ability to navigate the accelerating auto industry shakeup.” The analyst additionally identified that the buying and selling worth of Nio shares has grown above $2.5 billion over the previous two days. This is equal to the inventory’s cumulative worth over the previous two weeks. In the notice, Hsiao underscored sturdy ES8 pre-orders are the primary catalyst for the inventory’s rally. “Our checks suggest ES8 pre-orders (with Rmb5k refundable deposit) may have surpassed 30k at the weekend and kept rising,” he mentioned. “While real demand still hinges on order conversion, constructive feedback underpin the market’s belief that ES8 could go viral as L90 did last month, underpinning a monthly run rate of 40-50k units for NIO Group from Oct.” Hsiao mentioned there was an uptick in sentiment towards Nio, reflecting a extra constructive stance from buyers general. “While debates on the sustainability of NIO’s recovery persist, we noticed a sharp decline in client enquiries on NIO’s underlying demand and execution risk,” he wrote. “We’ve been asked more about the upcoming L60 and L80 facelifts (both early next year).”