On Thursday, JPMorgan revised its price target for XPeng (NYSE: NYSE:XPEV), a China-based electric vehicle manufacturer, to $9.00 from the previous $19.00, while keeping a Neutral rating on the stock. The financial institution's assessment is based on the company's strategic plans to launch over 10 new models under its Fu-Yao platform between 2024 and 2025 or later. This move is expected to contribute positively to XPeng's future.
The firm anticipates an improvement in XPeng's gross profit margin (GPM) starting from the second quarter of 2024 or the second half of the year as the company begins to collect technology royalty fees from Volkswagen (ETR:VOWG_p). This development is seen as a potential catalyst for XPeng's profitability.
Despite the lowered price target, JPMorgan's stance on XPeng stock remains unchanged at Neutral. The firm indicates that it is monitoring the situation for potential opportunities to revise its position, particularly if the expected catalysts start to take effect.
The adjustment in the price target reflects JPMorgan's current outlook on XPeng's financial prospects. The firm's commentary suggests a cautious but observant approach to the stock, pending the realization of the company's upcoming business developments.
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