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Why Niu Technologies' Stock Is Surging Today

By John Rosevear – Jun 19, 2020 at 1:55PM

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A bullish analyst note has investors' interest piqued.

What happened

Shares of Chinese electric-scooter maker Niu Technologies (NIU -3.92%) were moving higher on Friday, after a bullish note from a Wall Street analyst stoked already high investor interest in the shares. 

As of 1:30 p.m. EDT, Niu's shares were up about 14% from Thursday's closing price.

So what

In a new note on Friday morning, Piper Sandler analyst Alexander Potter raised his price target on Niu Technologies' stock to $24, from $11, and reiterated his overweight rating on the shares.

Potter said that investors have been bidding Niu's stock higher because they, like consumers, see that internet-connected electric scooters are a practical option for socially distanced urban transportation as the COVID-19 pandemic recedes. 

An Niu Technologies battery-electric scooter.

Image source: Niu Technologies.

Potter thinks that China's market for electric bicycles and scooters will grow by double-digit percentages this year, and that China's mandated scrappage rules and rising overseas demands could accelerate Niu's sales growth further in 2021.

Potter said Niu Technologies is his top post-coronavirus stock idea right now.

Now what

Niu Technologies posted a loss of 26.4 million Chinese yuan ($3.7 million) on revenue of 232.9 million yuan ($32.9 million) in the first quarter, as sales (understandably) declined 39% amid the pandemic's peak in its home country. The company said in May that production and sales were returning to pre-pandemic levels, and that technology investors could expect its second-quarter revenue to come in between 585 million yuan and 655 million yuan, up 10% to 23% over the second quarter of 2019.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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