The highly-volatile electric vehicle market just demonstrated its volatility once again. This time, the target is XPeng (NASDAQ:XPEV). It’s down substantially in Wednesday afternoon trading, and it’s all thanks to one shift in analyst sentiment.
This time, the shift came from JPMorgan (NYSE:JPM) via analyst Nick Lai. Lai lowered his rating on XPeng from Buy to Hold and also lowered the price target from $11 to $9. The reason behind the drop? A simple vote of no confidence. Essentially, Lai looks for XPeng to start losing ground. While most Chinese stocks got a boost from the post-Zero-Covid reopening, that’s starting to run out of steam, and Lai believes that XPeng doesn’t have much else to keep it going in the near term.
Moreover, Lai noted there’s an issue for the entire electric vehicle market to consider. While growth rates were staggering last year, up around 80%, that’s not likely to hold true for this year. Lai looks for growth rates to slow to about 20% in 2023. That’s still substantial growth, but based on the huge difference between this year and last, it could all but stop in 2024. Additionally, it also means a smaller pot for all the competitors involved. XPeng is just part of the Chinese electric vehicle market, which has quite a bit of competition already in play.
Overall, Wall Street is mildly optimistic about XPeng stock, as it currently stands as a Moderate Buy by analyst consensus. Further, its average price target of $11.61 per share implies upside potential of 18.53%.
