Goldman Sachs raised its price target on XPeng following the company’s first-quarter results released on Wednesday, highlighting improved demand and production ramp-up.
Increasing competition and uncertainty over policy support led the firm to maintain its Neutral rating on the stock.
The price target for XPeng’s Hong Kong-listed shares was raised by 12% to HK$64 from HK$57, while the U.S.-listed shares were raised from $14.6 to $16.4.
After the earnings report on Wednesday, the company’s U.S. stock jumped 13% to $22.25.
However, the shares plunged 7.9% on Thursday to $20.50. The new price target implies a downside of 20%.
Year to date, the stock has surged 73.4%, and it has more than doubled in the past twelve months.
In a new research note published this week, analyst Tina Hou stated that risk-reward is “fair given the shares are currently trading in line with the historical average,” considering the past two years.
According to the analyst, revenue and gross profit were “in line with expectation” and net profit was higher due to lower spending on “sales and marketing expenses,” which showed “better cost control.”
XPeng‘s first quarter revenue jumped 141% year over year and 2% from the previous quarter to $2.19 billion while losses narrowed.
Total revenue for the second quarter is expected to jump between 115% and 130% to 17.5-18.7 billion yuan ($2.4-2.6 billion), which is within the Wall Street consensus.
Vehicle revenue was +4% above Goldman Sachs estimates, “mainly due to higher export volume.”
It jumped to 159.2% year over year to 14.37 billion yuan ($1.98 billion) and were just 2% under the 14.67 billion yuan from the fourth quarter.
XPeng delivered 94,008 vehicles in the first quarter, exceeding the company’s earlier guidance of 91,000 to 93,000 units issued at the previous earnings results report.
The delivery guidance for the second quarter is in-line with Goldman Sachs and Visible Alpha estimates — the brand expects deliveries to be between 102,000 and 108,000 vehicles. In April, the brand delivered over 35,000 vehicles.
Goldman Sachs estimates XPeng‘s deliveries to “continue its recent momentum with the latest Mona M03 and P7+ model launches,” while expecting the brand to increase annual sales by 98% this year “with 4 new model launches.”
Based on the 190,068 vehicles delivered last year, the firm expects the carmaker to sell 376,334 units in 2025.
Earlier this week, the carmaker unveiled its Mona M03 Max model, with its official launch scheduled for May 28. The new variant will be priced from 155,800 yuan ($21,610).
CEO He Xiaopeng said in the latest earnings call that Mona, previously set to become a sub-brand of XPeng, will be expanded into a series with more models expected “in 2026.”
Last week, XPeng unveiled its refreshed P7 sedan, expected to launch in China in the third quarter. It is priced within the 300,000 yuan ($41,600) segment and features advanced driving assistance in both urban and highway scenarios.
The model was designed for global markets, as the brand aims to double its presence overseas to 60 markets in 2025.
In March, XPeng revealed the updated versions of the G6 and G9 SUVs. Last month, the brand also launched the refreshed version of the multi-purpose X9.
The Guangzhou-headquartered brand ended the first quarter with 26 billion yuan in net cash (compared to 24 billion yuan in the last quarter and the same 26 billion yuan a year ago).
“At the same time, we remain cautious on the competitive environment going into 2025,” the analyst noted, saying that the firm is concerned about “the continuation of government trade-in subsidy.”
In January, China said it would extend trade-in subsidies through 2025, easing concerns about a drop in car sales after the 2024 policy ended. Analysts expect this to boost demand by 3 million vehicles in 2025.
Bernstein also increased the price target on XPeng shares by 5.5% to $19.00, up from the previous $18.00, while maintaining a Market Perform rating on the stock. It implies a downside of 7.3%, based on Thursday’s close at $20.5.
Macquarie analyst Eugene Hsiao upgraded XPeng‘s H.K.-listed stock rating from Neutral to Outperform, raising the price target by 6.9% to HK$93.00 from HK$87.00.
