Connect with us

Energy & Critical Metals

Nio Stock Has Minimal Downside Risk and Significant Upside Potential

For investors, the decline in Nio (NYSE:NIO) stock might seem puzzling. Even with steady progress from a business perspective, Nio stock has declined by…

Published

on

This article was originally published by Investor Place

For investors, the decline in Nio (NYSE:NIO) stock might seem puzzling. Even with steady progress from a business perspective, Nio stock has declined by over 50% in the last 12 months.

Source: xiaorui / Shutterstock.com

However, I am bullish on Nio stock for 2022 and beyond. At current levels of $30, the stock looks attractive for accumulation.

There are two important points to note from a price action and market sentiment perspective. Let’s look at these before talking about the business fundamentals.

First, Nio stock rallied from penny stock status in 2020 to highs of around $65 in February 2021. After multi-fold returns, a correction of 50% is not a concern. In particular, when Nio has utilized higher stock price levels to raise funds.

Further, the best time to buy a stock is not when sentiments are bullish. The best time for exposure is when sentiments are bearish and markets seem jittery.

The stock has also corrected with China’s EV industry expected to face the chip shortage in 2022. Estimates suggest that 1 million vehicles will be short of vital components in 2022. However, supply chain concerns are likely to ease in the second half of 2022. I believe that this concern is largely discounted in the stock price.

For Nio stock, this is therefore the best entry point considering a medium- to long-term investment horizon.

23 analysts offering a 12-month price forecast for Nio stock have a median price target of $58.30. This would imply a nearly 100% upside from current levels. On the downside, the most bearish analyst price target is $37.74. This underscores my view that the worst of the correction is over for Nio stock.

Big Growth Plans Will Deliver Stock Upside

Even with chip shortage challenges, Nio reported strong numbers in 2021. Nio delivered 91,429 vehicles during the year, which was higher by 109.1% on a year-on-year basis. It seems very probable that delivery growth numbers will be higher in 2022 and 2023 as compared to last year.

Nio has positioned itself for growth on several fronts. Most importantly, it has the financial resources to execute big plans.

As of September 2021, the company had $7.3 billion in cash and equivalents. With further equity dilution in November 2021, the company’s cash position is $9.3 billion (un-adjusted for cash burn in Q4 2021).

In terms of new model launches, Nio expects to begin delivery of the ET7 in March. It’s a premium electric sedan that will compete with Tesla Model S.

Additionally, Nio has unveiled ET5, which is a mid-size smart-electric sedan. The model will be available for delivery in September and will compete with Tesla Model 3.

An important point to note is that ET5 has a lower pricing and will help Nio reach a wider customer base. Nio’s battery-as-a-service plan will make the down payment even more attractive. The BaaS subscription allows customers to pay a monthly subscription cost to swap depleted batteries with fully charged ones.

Vehicle deliveries will also accelerate as Nio expands in international markets. For 2022, the company targets entry into Germany, the Netherlands, Denmark and Sweden. The company has an ambitious plan to expand to 25 countries by 2025.

On the flip-side, Nio will witness higher marketing and sales cost in 2022. Entry into new markets is the key reason. This can impact EBITDA (earnings before interest, taxation, depreciation and amortization) level profitability. However, I don’t see that as a major risk factor. The markets will focus on expansion, deliveries growth and operating leverage.

Concluding Views

Nio has boosted investments in research and development in Q3 2021. On a year-over-year basis, R&D expenses increased by 101.9% to $185.2 million.

With intensifying competition in the industry, technological edge is a key survival factor. With higher investments in innovation and with a strong financial flexibility, Nio is positioned to survive and grow.

With these factors in consideration, Nio stock looks attractive after a meaningful correction. I would not be surprised if the stock doubles in the next 12 to 18 months.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

More From InvestorPlace

The post Nio Stock Has Minimal Downside Risk and Significant Upside Potential appeared first on InvestorPlace.

batteries

Author: Faisal Humayun

Energy & Critical Metals

Tronox Holdings plc (NYSE:TROX) Expected to Announce Quarterly Sales of $859.99 Million

Analysts expect Tronox Holdings plc (NYSE:TROX) to report $859.99 million in sales for the current quarter, Zacks Investment Research reports. Two analysts…

Analysts expect Tronox Holdings plc (NYSE:TROX) to report $859.99 million in sales for the current quarter, Zacks Investment Research reports. Two analysts have provided estimates for Tronox’s earnings, with the highest sales estimate coming in at $867.57 million and the lowest estimate coming in at $852.40 million. Tronox posted sales of $783.00 million in the same quarter last year, which would indicate a positive year-over-year growth rate of 9.8%. The company is expected to report its next quarterly earnings results after the market closes on Wednesday, February 16th.

On average, analysts expect that Tronox will report full year sales of $3.55 billion for the current year, with estimates ranging from $3.54 billion to $3.56 billion. For the next financial year, analysts anticipate that the company will report sales of $3.83 billion, with estimates ranging from $3.75 billion to $3.93 billion. Zacks’ sales averages are a mean average based on a survey of sell-side analysts that follow Tronox.

Tronox (NYSE:TROX) last issued its quarterly earnings data on Wednesday, October 27th. The company reported $0.72 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.64 by $0.08. Tronox had a net margin of 7.14% and a return on equity of 15.84%. The company had revenue of $870.00 million for the quarter, compared to analyst estimates of $896.40 million. During the same period in the prior year, the firm earned $0.05 earnings per share. The company’s revenue was up 28.9% on a year-over-year basis.

TROX has been the topic of a number of research analyst reports. Deutsche Bank Aktiengesellschaft initiated coverage on shares of Tronox in a research note on Thursday, October 14th. They issued a “buy” rating and a $30.00 price target on the stock. Morgan Stanley lifted their price objective on shares of Tronox from $24.00 to $26.00 and gave the company an “equal weight” rating in a research note on Tuesday, December 14th. UBS Group decreased their price target on shares of Tronox from $32.00 to $31.00 and set a “buy” rating for the company in a research note on Tuesday, January 4th. Finally, Zacks Investment Research upgraded shares of Tronox from a “hold” rating to a “buy” rating and set a $27.00 price target for the company in a research note on Friday, January 7th. One analyst has rated the stock with a hold rating and five have given a buy rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Buy” and an average price target of $28.67.

A number of hedge funds and other institutional investors have recently modified their holdings of TROX. Advisory Services Network LLC bought a new position in Tronox in the second quarter worth $34,000. Banque Cantonale Vaudoise purchased a new position in Tronox in the third quarter worth about $37,000. Maverick Capital Ltd. boosted its position in Tronox by 170.0% in the second quarter. Maverick Capital Ltd. now owns 3,642 shares of the company’s stock worth $82,000 after purchasing an additional 2,293 shares during the last quarter. Strs Ohio purchased a new position in Tronox in the third quarter worth about $96,000. Finally, Macquarie Group Ltd. lifted its position in shares of Tronox by 116.3% during the 2nd quarter. Macquarie Group Ltd. now owns 5,545 shares of the company’s stock valued at $124,000 after buying an additional 2,982 shares in the last quarter. Institutional investors and hedge funds own 66.82% of the company’s stock.

NYSE:TROX opened at $22.64 on Thursday. The company has a debt-to-equity ratio of 1.34, a quick ratio of 1.40 and a current ratio of 2.70. Tronox has a 52 week low of $15.16 and a 52 week high of $26.33. The firm has a market cap of $3.48 billion, a price-to-earnings ratio of 14.24 and a beta of 2.29. The firm’s 50-day simple moving average is $23.38 and its 200 day simple moving average is $22.45.

The business also recently declared a quarterly dividend, which was paid on Monday, December 13th. Stockholders of record on Monday, November 15th were given a dividend of $0.10 per share. This represents a $0.40 annualized dividend and a dividend yield of 1.77%. The ex-dividend date was Friday, November 12th. Tronox’s dividend payout ratio is presently 25.16%.

Tronox Company Profile

Tronox Holdings Plc engages in the mining and inorganic chemical business. Its products include Titanium Dioxide Mineral Sands. The firm also mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments. The company was founded in 2006 and is headquartered in Stamford, CT.

Featured Story: Systematic Risk

Get a free copy of the Zacks research report on Tronox (TROX)

For more information about research offerings from Zacks Investment Research, visit Zacks.com

The post Tronox Holdings plc (NYSE:TROX) Expected to Announce Quarterly Sales of $859.99 Million appeared first on ETF Daily News.

nyse
titanium

Continue Reading

Energy & Critical Metals

$859.99 Million in Sales Expected for Tronox Holdings plc (NYSE:TROX) This Quarter

Equities analysts predict that Tronox Holdings plc (NYSE:TROX) will announce $859.99 million in sales for the current quarter, according to Zacks Investment…

Equities analysts predict that Tronox Holdings plc (NYSE:TROX) will announce $859.99 million in sales for the current quarter, according to Zacks Investment Research. Two analysts have provided estimates for Tronox’s earnings, with the lowest sales estimate coming in at $852.40 million and the highest estimate coming in at $867.57 million. Tronox reported sales of $783.00 million in the same quarter last year, which indicates a positive year over year growth rate of 9.8%. The firm is expected to issue its next quarterly earnings results after the market closes on Wednesday, February 16th.

On average, analysts expect that Tronox will report full year sales of $3.55 billion for the current financial year, with estimates ranging from $3.54 billion to $3.56 billion. For the next year, analysts forecast that the firm will report sales of $3.83 billion, with estimates ranging from $3.75 billion to $3.93 billion. Zacks’ sales averages are an average based on a survey of sell-side analysts that that provide coverage for Tronox.

Tronox (NYSE:TROX) last issued its quarterly earnings data on Wednesday, October 27th. The company reported $0.72 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.64 by $0.08. Tronox had a net margin of 7.14% and a return on equity of 15.84%. The company had revenue of $870.00 million for the quarter, compared to analyst estimates of $896.40 million. During the same period in the prior year, the firm earned $0.05 earnings per share. The company’s revenue was up 28.9% on a year-over-year basis.

TROX has been the topic of a number of research analyst reports. Zacks Investment Research upgraded shares of Tronox from a “hold” rating to a “buy” rating and set a $27.00 price target on the stock in a research note on Friday, January 7th. Morgan Stanley boosted their price target on shares of Tronox from $24.00 to $26.00 and gave the stock an “equal weight” rating in a research report on Tuesday, December 14th. Deutsche Bank Aktiengesellschaft assumed coverage on shares of Tronox in a research report on Thursday, October 14th. They issued a “buy” rating and a $30.00 price target on the stock. Finally, UBS Group lowered their price objective on shares of Tronox from $32.00 to $31.00 and set a “buy” rating for the company in a research note on Tuesday, January 4th. One equities research analyst has rated the stock with a hold rating and five have given a buy rating to the company. According to data from MarketBeat, the company has a consensus rating of “Buy” and an average target price of $28.67.

TROX stock opened at $22.64 on Thursday. The company has a quick ratio of 1.40, a current ratio of 2.70 and a debt-to-equity ratio of 1.34. Tronox has a 12 month low of $15.16 and a 12 month high of $26.33. The firm has a market cap of $3.48 billion, a P/E ratio of 14.24 and a beta of 2.29. The company’s 50-day moving average price is $23.38 and its two-hundred day moving average price is $22.45.

The firm also recently declared a quarterly dividend, which was paid on Monday, December 13th. Shareholders of record on Monday, November 15th were given a dividend of $0.10 per share. This represents a $0.40 dividend on an annualized basis and a yield of 1.77%. The ex-dividend date of this dividend was Friday, November 12th. Tronox’s payout ratio is currently 25.16%.

A number of institutional investors and hedge funds have recently bought and sold shares of the business. Citigroup Inc. lifted its holdings in Tronox by 169.2% in the 2nd quarter. Citigroup Inc. now owns 173,162 shares of the company’s stock worth $3,879,000 after purchasing an additional 108,826 shares in the last quarter. Mercer Global Advisors Inc. ADV acquired a new position in shares of Tronox in the second quarter valued at about $264,000. Deutsche Bank AG grew its holdings in Tronox by 42.4% during the second quarter. Deutsche Bank AG now owns 229,359 shares of the company’s stock worth $5,137,000 after acquiring an additional 68,240 shares during the period. BlackRock Inc. boosted its position in Tronox by 2.2% during the second quarter. BlackRock Inc. now owns 8,011,080 shares of the company’s stock worth $179,448,000 after purchasing an additional 175,080 shares in the last quarter. Finally, Bank of New York Mellon Corp lifted its position in shares of Tronox by 448.8% in the second quarter. Bank of New York Mellon Corp now owns 2,317,521 shares of the company’s stock valued at $51,913,000 after acquiring an additional 1,895,230 shares in the last quarter. Institutional investors and hedge funds own 66.82% of the company’s stock.

About Tronox

Tronox Holdings Plc engages in the mining and inorganic chemical business. Its products include Titanium Dioxide Mineral Sands. The firm also mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments. The company was founded in 2006 and is headquartered in Stamford, CT.

Read More: What is quantitative easing?

Get a free copy of the Zacks research report on Tronox (TROX)

For more information about research offerings from Zacks Investment Research, visit Zacks.com

The post $859.99 Million in Sales Expected for Tronox Holdings plc (NYSE:TROX) This Quarter appeared first on ETF Daily News.

nyse
titanium

Continue Reading

Energy & Critical Metals

GTI Resources is all over uranium tailwinds as Wyoming ISR launches for 2022

Special Report: Preparations are underway to complete a key drill program at GTI Resources’ Thor ISR uranium project in Wyoming’s … Read More
The…

Preparations are underway to complete a key drill program at GTI Resources’ Thor ISR uranium project in Wyoming’s Great Divide basin after early results from 2021 demonstrated its potential to become an economic uranium mine.

Field preparations are already under way, with exploration to recommence at the Wyoming ISR project on January 31. Two mud rotary drill rigs will be remobilised in the coming weeks to complete the last 60 holes of GTI Resources’ (ASX:GTR) first drill program.

Numbers to enjoy

39 of the 100 holes in the maiden 15,000m drill program in Wyoming were completed before the Christmas break with almost half (19) returning grades and widths comparable to UR Energy’s Lost Creek mine next door.

Lost Creek contains 18.3Mlbs at 0.044-0.48% estimated uranium oxide, enough for a 12-15 year mine life waiting for the uptick in uranium prices expected from a major looming supply shortage.

Rising prices for the nuclear fuel drove one of the mining industry’s best performing commodity classes last year, with market tightness expected to keep spot prices moving north going forward.

Compare the market – GTI’s ISR looking good

GTI is well placed to capture those tailwinds.

Results from the first 39 holes struck a consistent and well mineralised sandstone unit at 200ft deep that is 110-120 feet thick.

Its drilling, above a 0.02% grade cutoff, returned an average grade of 0.059% (above the Lost Creek estimate) and average grade thickness of 0.6GT, favourably comparable to Peninsula Energy’s (ASX:PEN) Lance project in Wyoming (GT 0.46).

“Drill results so far show that there is a strongly mineralised uranium system at Thor with potential for development,” GTI executive director Bruce Lane said.

“The mineralisation  grade  and  thickness  encountered in 19 of the first 39 holes appears to be comparable to that of our neighbour UR Energy’s 18 Mlbs  production deposit at Lost  Creek.”

“We’re looking forward to recommencing drilling in the coming weeks with the outlook for uranium in 2022 remaining very positive.”

 


 

 

This article was developed in collaboration with GTI Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post GTI Resources is all over uranium tailwinds as Wyoming ISR launches for 2022 appeared first on Stockhead.


Author: Special Report

Continue Reading

Trending