By Michael Elkins
CFRA Research initiated coverage of Xpeng Inc (NYSE:XPEV) with a Sell rating and an $8.00 price target on the stock as analysts see competition in China rising aggressively in the next two to three years.
They expect XPeng’s revenue momentum to sustain, driven by rising demand for electric vehicles. However, more traditional brands like Toyota (NYSE:TM), Volkswagen (OTC:VLKAF) (ETR:VOWG_p), and Ford Motor Company (NYSE:F) are rapidly rolling out their respective EV models, in addition to there being threats from well-established Chinese EV brands such as Li Auto Inc (NASDAQ:LI), BYD (OTC:BYDDY), and Geely (OTC:GELYY).
They wrote in a note, "We expect relatively small players like XPeng to face difficulties in expanding market share organically after the pent-up demand tapers. This becomes additionally challenging as industry peers are cutting prices to boost sales volume. Hence, we are cautious about XPeng's liquidity, given the necessity for substantial investment."
CFRA estimates losses per share of CNY 3.60 (CNY 1 = $0.1454) for 2023 and CNY 2.47 for 2024.
Shares of XPEV are up 4.43% in afternoon trading on Tuesday.