Chinese electric vehicle maker XPeng (NYSE: XPEV) has had quite an auspicious year so far.
In early January, company chairman and chief executive officer (CEO) He Xiaopeng revealed ambitious expansion plans, which should see the automaker hire as many as 6,000 new workers and expand to a total of 60 markets.
Several key announcements followed — most notably, partnerships with Volkswagen and British Petroleum, both of which ensured charger cross-compatibility.
Picks for you
Then, in late January, XPeng published its vehicle delivery results for the month. With 30,350 cars delivered, the company surpassed the 30,000 mark for the third month in a row. More notably, this also represented the first instance since September 2022 in which XPeng’s deliveries surpassed that of key rival Li Auto.
By press time on February 27, XPEV was changing hands at a price of $22.14, after a 16.76% rally that occurred over the course of the last week. This latest move to the upside has brought the Chinese EV stock’s year-to-date (YTD) gains up to 90.14%.
UBS hikes price target on surging EV stock — but maintains conservative outlook
On February 14, Paul Gong, a UBS analyst, upgraded the Chinese EV stock from a prior ‘Sell’ rating to a ‘Neutral’ rating. In addition, the researcher hiked his price target from $8.8 to $18. If met, Gong’s 12-month price forecast for XPEV stock would equate to an 18.69% downside.
That might not sound quite like a positive development — but a closer look at Gong’s rationale reveals a cautious, yet not necessarily negative outlook.
In a note shared with investors, the UBS analyst stated that “After DeepSeek shocked equity markets, we believe investors are now willing to assign some value for AI potential, even remote applications.” Gong further opined that XPeng warrants attention in this regard, as it has a pronounced focus on AI.
Further clarifying his conservative price target, the research cited the EV stock’s relatively rich valuation, which, at a 1.4x estimated 2026 price-to-sales (P/S), stands at roughly double that of key competitors Li Auto and Nio.
Lastly, Gong noted the company’s recent sales momentum of over $30k units per month, but also highlighted that the XPEV stock is vulnerable to price competition in the mass market, and that BYD’s democratization of autopilot prevents UBS from adopting a more bullish stance. With all of that said, it’s still inarguable that this was a rather massive upgrade in terms of price target — and other analysts might well follow suit soon.
Featured image via Shutterstock
