Much like other EV makers, 2024 has been a rough year for XPeng (NYSE:XPEV). Stocks across the board have taken a hit, and XPeng shares, in particular, have tumbled 42% year-to-date.
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However, J.P. Morgan analyst Nick Lai thinks now is the time to reappraise the company’s prospects because the coming months could see the business enter a fruitful phase.
New models – Mona M03 and P7 plus (both sedans) – are coming and should help quarterly deliveries rise from ~45,000 units in 3Q24 (the guide calls for 40- 45,000) to ~80,000 in 4Q24, and then a full contribution should follow next year.
Into 2025, and due to more new models, Lai reckons sales volume could exceed 300,000 units, amounting to a 72% year-over-year increase vs. 180,000 units expected in 2024. That said, considering the “competitive landscape,” Lai also makes the case “visibility could be low.”
Still, Lai’s confidence in XPeng’s short- and medium-term sales prospects has grown following the Mona M03 launch in late August. After visiting stores and test-driving the M03, Lai observed an increased wait time (currently 5-7 weeks, compared to 3-4 weeks at the end of August), larger crowds in stores, and “attractive price points” starting at Rmb119.8k (~$16,884). Lai’s sales forecast for 2025 (308,655 units) includes the new M03 and P7 plus models as well as about 3-4 new models throughout 2025.
“We will closely monitor order flow and sustainability of each of these models, as historically these two factors play a key role in XPeng’s stock performance, both to the upside and downside,” Lai said.
Accordingly, on the back of a “possible re-rating led by solid volume into 4Q24-2025,” and keeping in mind how the stock appreciated by 30% during the G6 launch last year, Lai has upgraded his XPEV rating from Neutral to Overweight (i.e., Buy). Lai’s price target also gets a bump, rising from $8 to $11.5, and now suggesting upside of 34% lies in wait for the coming year. (To watch Lai’s track record, click here)
Looking at the ratings breakdown, based on 7 Buys, 2 Holds and 1 Sell, XPEV stock claims a Moderate Buy consensus rating. Meanwhile, the $11.55 average target closely resembles Lai’s objective. (See XPeng stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
