Last week, Nio (NIO 5.32%) announced its second-quarter earnings report, but it's this week that the stock is soaring. That report had both positive and negative aspects, but that's not why the stock is on track to jump double digits this week. Heading into the final day of trading, Nio's American depositary shares (ADSs) were up about 12% for the week, according to data provided by S&P Global Market Intelligence.
The bulk of this week's gain came on Monday after an analyst called Nio his top pick among Chinese EV makers. Deutsche Bank analyst Edison Yu assigned it a price target of $39 per share. That share price represented a gain of more than 100% from last week's closing price of just above $19. Yu thinks the new models that are coming out from Nio will be the catalyst to move the stock higher.
Nio began shipping its latest SUV model last month. It delivered nearly 400 of the five-seater ES7 SUVs in August. It expects to quickly follow that with initial deliveries of its second electric sedan model at the end of this month. The ET5 is a mid-size sedan and follows the company's large, luxury ET7 sedan that went into production earlier this year.
The company has high hopes for the ET5. At a Chinese auto show lasts month, Nio Co-Founder and President Qin Lihong said he expects the ET5 to gain more sales than the gasoline-powered BMW 3 Series in China within just a year.
Nio reported a higher net loss in the second quarter, but sales increased 22% year over year. Yu thinks the company's already growing sales will get another boost from the new models. Investors, too, seem to be looking at a new leg of growth as they bid shares up meaningfully this week.