What happened

Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) opened lower on Wednesday, after a Wall Street analyst cut his firm's rating on the company's stock. 

As of 10:15 a.m. EDT, NIO's American depositary shares were down about 6.3% from Tuesday's closing price.

So what

In a new note on Wednesday morning, Goldman Sachs analyst Fei Fang cut his rating on NIO's American depositary shares to neutral from buy, while raising his price target to $7.00 from $6.40. 

What's that about? Simply put, NIO's shares have been on a tear this month, and Fang thinks they're now more or less fully valued. 

Fang upgraded NIO's shares to buy from neutral just three weeks ago, on June 3. At the time he said that the company's reduced cash-burn rate and an equity infusion from economic-development authorities in China had addressed auto investors' concerns about "liquidity risks" that may have held back the stock. 

A red NIO ES6, an upscale electric crossover SUV.

NIO's five-passenger ES6 has been the company's biggest seller since its launch last year. Image source: NIO.

He also noted that despite the COVID-19 outbreak in China, NIO's deliveries were up 37% in the first four months of 2020, and he said that NIO's sales now appear to be "reputation-driven" rather than "promotion-driven."

Fang noted on Wednesday that NIO's shares have risen about 50% since his June 3 note.

Now what

Notwithstanding the downgrade, NIO appears to be doing well. The company said last month that investors should expect its deliveries and revenue to more than double in the second quarter from the same period last year, and from the first quarter of 2020. So far things look good: NIO's deliveries in April and May were up a combined 198% from the same two months in 2019.