Goldman Sachs initiated coverage of Xpeng with a buy rating, calling for nearly 30% upside for the Chinese electric vehicle maker. The Wall Street firm set a 12-month price target on U.S.-listed Xpeng shares at $18.10, a roughly 28% gain from Monday’s close of $14.15. The stock is up more than 5% Tuesday following Goldman’s bullish comment. “In the near-term, we expect the company’s vehicle delivery volume to regain momentum with the latest G6 model launch, and margin to improve on larger vehicle delivery scale together with battery pricing decline,” Goldman said in a note. The firm said it’s confident on the competitiveness of Xpeng’s latest car — the G6 Ultra Smart Coupe SUV — as well as the company’s capability to launch more compelling products going forward. The G6 was launched at the end of the second quarter, with deliveries beginning this month. “We believe the market hasn’t fully reflected G6’s potential, as it ranks No.1 among comparable models, and in our view is the most competitive product released by XPeng to date,” Goldman said. Last week, Xpeng reported a quarterly return to growth for car deliveries, following more than a year of declines. The company said it delivered 23,205 cars in the second quarter of 2023, logging a 27% quarter-on-quarter rise. This surpassed Xpeng’s own delivery forecast of between 21,000 and 22,000 units. Shares of Xpeng have already rallied about 50% year to date. Goldman said the Guangzhou, China-headquartered company could capture the EV market overseas in the long run. “As a pure EV maker at its volume ramp-up stage, XPeng currently prefers to sell into overseas markets through exports only per its latest strategy,” Goldman said. “In the longer term, we believe the pure-EV setup makes the company well positioned to seize the overseas markets’ EV demand.” -CNBC’s Michael Bloom contributed to this report.
