Barclays analyst Jiong Shao maintained a Sell rating on XPeng, Inc. ADR (XPEV – Research Report) today and set a price target of $20.00.
Jiong Shao’s rating is based on several factors that influence the current and future valuation of XPeng, Inc. Despite the company’s impressive turnaround in sales momentum, with vehicle deliveries significantly increasing in recent quarters, the stock’s valuation appears stretched due to a substantial rise in share price. This increase in valuation may not be justified given the competitive landscape of the Chinese EV market and the uncertainties surrounding customer acceptance of new models.
Moreover, while XPeng has a robust product pipeline with new and refreshed models expected to launch, the company’s ability to maintain and improve its gross margins remains a concern. Although management has set a target to achieve breakeven by the fourth quarter of 2025, the current valuation levels seem high relative to these projections. These factors combined lead to a cautious outlook, prompting the Sell rating from Jiong Shao.