Nio Stock Upgraded to Buy by Goldman Sachs on Growth and Valuation

Shares of Nio Inc. (NYSE: NIO) rose in premarket trading after Goldman Sachs upgraded the electric vehicle maker to Buy from Neutral, citing expectations for strong growth and a compelling valuation. The bank raised its 12-month price target for Nio's American Depositary Receipts (ADRs) to $7.00, implying approximately 47% upside from previous levels.

The Analyst's Thesis

In a note to clients, Goldman Sachs analysts said they expect Nio to deliver "not only one of the fastest volume growth, but also a premium margin profile and strong profit/FCF turnaround in 2026E." The upgrade reflects confidence in the company's recent performance and future product pipeline.

The bank now forecasts Nio will achieve a full-year 2026 volume growth of 43% and revenue growth of 60%. Critically, Goldman projects Nio will swing from a 12.4 billion yuan loss in 2025 to an adjusted net profit of 1.6 billion yuan in 2026, with free cash flow turning positive at 12.1 billion yuan.

Outperforming the Market

Goldman highlighted Nio's ability to buck a wider industry trend. While the broader domestic new-energy-vehicle (NEV) market in China declined 14% year-over-year in the first half of 2026, Nio's sales volume grew by 67% during the same period, according to the report.

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This outperformance was driven by the successful launch of its new ES8 and ES9 models. These vehicles have captured the leading position with a 39% market share in China's premium NEV segment, defined as vehicles priced above 400,000 yuan.

Valuation and Outlook

Analysts noted that Nio's stock performance, down 32% from its April 2026 peak, appears "disconnected from the company’s improving fundamentals." The firm pointed out that Nio trades at a significant discount to pure-EV peers, including a 25% to 29% discount on 2026-2027 price-to-sales multiples.

Looking ahead, Goldman identified potential catalysts including the delivery ramp-up for the ES8 five-seater version and continued profit improvement. The bank's 2026-2028 earnings estimates are now 30% above consensus, driven by higher revenue projections and expectations for more efficient spending.