XPeng stock falls after J.P. Morgan cuts rating and price target, saying reopening rally could run out of steam soon
Shares of XPeng Inc. fell Wednesday, after J.P. Morgan backed away from its bullish call on the China-based electric vehicle maker, saying the COVID-related reopening trade has been overdone.
Analyst Nick Lai said with China’s recent relaxation of COVID-related restrictions, the reopening trade in auto stocks has been playing out rapidly. And as earnings expectations have yet to catch up, he fears the reopening rally could “run out of steam” in the near term. Lai said he believes the stock’s rally has largely priced in a recovery outlook from the second quarter of 2023, while he’s concerned about possible cuts to consensus estimates.Lai also cut his 2023 delivery estimate to 155,000 vehicles from 210,000, and said margins could be hit hard, especially in the first quarter as a result of new energy vehicle subsidy shortfalls.
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