Goldman downgrades XPeng to “neutral” amid competitive pressures

Investing.com - Goldman Sachs downgraded Xpeng Inc (NYSE: XPEV). to "neutral" from "buy", citing rising competitive challenges in China's new energy vehicle (NEV) market and stock already significant outperformed in recent months leaving less room for growth.

US listed XPeng shares were last trading at 3.6% $12.2 in New York.

XPeng’s shares have surged by 67% in the U.S. and 83% in Hong Kong over the past two months, driven by strong orders and deliveries for its new models, including the M03 and P7+.

Goldman anticipates XPeng's vehicle deliveries will increase by 81% year-on-year in 2025, supported by at least four new model launches. However, intensifying price cuts, particularly in the first quarter of 2025, and uncertainty over government trade-in subsidies weigh on the outlook.

Goldman raised its 2024-2026 revenue forecasts for XPeng by 5%-9%, reflecting sales growth expectations.

The investment bank adjusted its 12-month price target for XPeng to $12.50 per U.S. ADR and HK$49 per Hong Kong share, representing a slight downside from current levels, note added.

Goldman’s downgrade follows its initial "Buy" rating in July, during which XPeng's U.S. ADRs have underperformed the S&P 500 by 49 percentage points, amid heightened domestic competition.

While XPeng has shown recent strength with improving margins and order volumes, Goldman remains cautious on potential risks, including intensified market competition and production challenges.

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