Citi raised its price target on Nio by 23.5 percent, citing expectations for strong growth in the company's shipments.

In a research note sent to investors on Tuesday, Citi analyst Jeff Chung raised his price target on Nio to $72 from $58.3 and maintained a buy rating.

Nio closed up 1.9 percent to $50.34 on Tuesday, closing above $50 for the first time since Feb. 24. Citi's latest price target implies that the stock has 43 percent more upside.

Chung expects Nio to ship strong numbers in the second quarter and to keep growing sequentially for the remaining two quarters of the year.

The analyst expects Nio to post strong second-half results even if the industry-wide chip shortage does not ease significantly.

Chung expects Nio's first EV exports to Northern Europe this year to be a bright spot, and the market is underestimating it.

This is similar to the view of Edison Yu, an analyst at Deutsche Bank. "We think Nio selling tens of thousands of vehicles per year in Europe would be considered a success mid-term and investors do not give them credit for this at all," Yu said in a report sent to investors on June 7.

Chung raised Nio's sales forecast to 93,000 units in 2021 from 90,000 and to 160,000 units in 2022 from 155,000.