Freedom Capital Markets Upgrades XPeng to Buy, $25 PT

Freedom Capital Markets analyst Roman Lukianchikov upgraded XPeng (NYSE: XPEV) from Hold to Buy with a price target of $25.00 (from $20.00).

“The company’s results exceeded expectations, but the outlook was dampened by weak guidance for the next quarter.

Innovation has enabled the launch of the low-cost sub-brand Mona, driving revenue growth, while greater technological sophistication has allowed XPeng to price its premium vehicles above competitors, supporting margins.

An expanded partnership with Volkswagen, the rollout of new premium models and international expansion could allow the company to reach break-even in the fourth quarter of this year.

However, intensifying competition in the sector will make this target difficult to achieve. We issue a “Buy” recommendation and raise our target price for XPEV shares from $20 to $25”

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