Xpel selloff on Tesla paint news overdone, says EF Hutton

EF Hutton says shares of Xpel (XPEL) sold off today after Tesla (TSLA) announced it would soon offer seven colors of paint protection film wrap and possibly also a clear PPF option. The firm’s understanding is that this is part of a new regional pilot program that is not nationwide. It appears that the colored wraps are to be initially offered on the Model 3 and Model Y, the analyst tells investors in a research note. EF says this pilot of color PPF will not be done by Xpel, but instead by a different supplier and labor force. It estimates Tesla is only 7% of Xpel’s total revenue and possibly 9% of its PPF sales. EF believes Xpel’s current relationship with Tesla will be maintained for volumes into late 2024. It recommends investors buy Xpel on weakness, saying today’s selloff was overdone. The firm has a Buy rating on the shares with a $104 price target.