JPMorgan upgrades XPeng to Neutral with story ‘fundamentally changed’

JPMorgan analyst Nick Lai upgraded XPeng (XPEV) to Neutral from Underweight with an $18 price target. The stock rallied following the unexpected announcement of Volkswagen’s (VWAGY) $700M investment and strategic partnership between the two companies, the analyst tells investors in a research note. The firm believes XPeng’s long-term equity story “has now fundamentally changed” and will outweigh investor concerns on its near-term margin shortfall and financial stress. However, JPMorgan believes it remains too early to call for an outright Overweight at this stage considering business execution and the broader industry headwinds pertaining to competition.