XPeng faces market correction as onshore investors reduce positions
XPeng, a Chinese electric vehicle (EV) manufacturer, experienced an 8% decline in its H-shares on Monday, compared to the Hang Seng Index’s 2% drop. Analysts at Morgan Stanley believe that this downturn can be attributed to onshore investors reducing their positions in the company. These investors had been actively purchasing XPeng in the latter half of 2023 due to its significant advancements in autonomous driving technology. However, recent short-term events such as the XNGP upgrade and X9 launch had already resulted in a minor surge in XPeng’s stock price at the end of December.
Morgan Stanley reiterates Overweight rating on XPeng amid market volatility
Despite the recent market correction, Morgan Stanley reiterated its Overweight rating on XPeng and maintained its price target of $23.10. Analysts at the investment bank view the recent selloff as a favorable opportunity for investors to establish new positions. They believe that the current market volatility does not reflect the long-term potential of XPeng and its position in the rapidly growing EV market in China.
Short-term events and correction prompt investors to take profits in XPeng
The recent correction in the automotive sector, coupled with the short-term events such as the XNGP upgrade and X9 launch, led investors to take profits in XPeng. These events had already been factored into the minor surge in the company’s stock price at the end of last year. As a result, some investors decided to capitalize on the recent gains and sell their positions.
Morgan Stanley sees buying opportunity after XPeng’s recent selloff
Morgan Stanley sees the recent selloff in XPeng’s stock as a buying opportunity for investors. The investment bank believes that the fundamentals of the company, such as its advancements in autonomous driving technology and its strong position in the EV market, remain intact. Morgan Stanley suggests that investors with a long-term outlook should take advantage of the current market volatility and establish new positions in XPeng.
XPEV shares down in afternoon trading, investors await solid data points
Shares of XPeng were down 2.64% in afternoon trading on Monday. However, some investors may choose to wait for more solid data points, such as the delivery of X9 vehicles and order intake, before making any investment decisions. The Chinese New Year, which falls in February, could be an important milestone for XPeng as it could provide more clarity on the company’s sales and order trajectory. Investors are keenly awaiting these data points to make informed decisions about their investments in XPeng.
Analyst comment
Positive news: Morgan Stanley reiterates Overweight rating on XPeng amid market volatility, viewing the recent selloff as a favorable opportunity for investors to establish new positions.
As an analyst, I predict that the market for XPeng will experience some short-term volatility due to onshore investors reducing their positions and taking profits. However, the overall long-term potential of the company and its strong position in the EV market in China make it a buying opportunity for investors. The delivery of X9 vehicles and order intake during the Chinese New Year will provide important data points for investors to make informed decisions.
