Bank of America (BofA) analyst Ming Hsun Lee reiterated on Tuesday the Buy rating on XPeng shares after the Guangzhou-based carmaker reported its second quarter earnings results.
The brand has disclosed a record gross margin of 17.3%, while vehicle margin rose for the eighth consecutive quarter to 14.3% — more than doubling from a year ago.
In a new note obtained by PriceTarget, citing “higher sales” and a “strong model pipeline” in the second half of the year, the analyst raised BofA’s price target on XPeng by $1 to $26.
The updated target implies an upside potential of 30.7% on the stock, based on Monday’s close at $19.90.
As of the time of writing, US-listed shares of the Chinese automaker are trading 4.7% higher at $20.84 on Tuesday’s market session.
The analyst noted that XPeng‘s management aims to “book 19.6—21 billion yuan [$2.7—2.9 billion] revenue” in the third quarter, which would represent a 94—108% increase year over year.
The brand estimates to deliver between 113,000 and 118,000 vehicles from July to September, which would represent a 142-153% jump from a year ago.
In July, the company delivered 36,717 vehicles, meaning that it must deliver between 76,283 and 81,283 vehicles in August plus September to reach the guidance.
XPeng is also expecting “to reach monthly sales of 40,000+ units in September-December.”
According to Ming Hsun Lee, Bank of America estimates the automaker’s non-GAAP net loss to widen to 882 million yuan ($122.8 million) in 2025, up from the previously forecasted 703 million yuan.
In the second quarter, non-GAAP net loss was 390 million yuan ($50 million), below the 1.22 billion reported in the same period a year ago and the 430 billion yuan disclosed in the January-March period.
On Tuesday, US Tiger Securities also reaffirmed a Buy rating on the automaker, maintaining the $28 price target on its shares — which imply an upside potential of 40.7%.
Analyst Bo Pei noted that the firm sees XPeng‘s second quarter print as “a decisive beat on both top and bottom line, with clear visibility into a stronger margin profile (on track to profitability in the fourth quarter), an accelerating product cycle, and growing overseas contribution.”
