Shares of Chinese electric vehicle stocks Li Auto Inc . (NASDAQ:LI), NIO Inc. (NIO) and XPeng Inc. (NYSE:XPEV) jumped Friday after Morgan Stanley analysts released notes covering the stocks, stating they see the share prices rising over the next 15 days.
As of 12:12 p.m. ET, LI shares have risen 7%, NIO shares have gained 9.2%, and XPeng shares have jumped 10.7%.
The bank said the three stocks are "Research Tactical Ideas" and that it believes their share prices "will rise in absolute terms over the next 15 days."
The stocks have traded off recently. As a result, Morgan Stanley feels that makes their short-term valuation "much more compelling."
The firm also noted that on April 26, China's Ministry of Commerce announced it would offer Rmb7k and Rmb10k subsidies to consumers who trade in their old vehicles and buy a qualifying ICEV or NEV model, respectively, which the bank believes bodes well for overall sector demand.
Overall, the investment bank estimates there is about a 70% to 80% (very likely) probability that the stocks will rise in line with their expectations.