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Xpeng (XPEV) could hit $40, says analyst

Nio (NIO) stock surges on bullish developments

Deutsche Bank analyst Edison Yu urges investors to “hold the line again” on XPeng (XPEV) stock, in anticipation of a second-half-of-the-year “inflection” that will cause XPeng’s stock to “quickly recover.”

When it released its Q1 2021 results on Thursday last week, the electric car manufacturer scored a “earnings beat,” boosting vehicle deliveries 487 percent (13,340 units), sales 616 percent ($450.4 million), reversing last year’s negative gross profit margin to replace it with an 11.2 percent gross margin in Q1 2021, and losing less money on the bottom line ($0.14 per share) than previous.

According to the analyst, XPeng’s Q1 deliveries were “somewhat” higher than expected, as were gross margins gained on those vehicles (11.2 percent vs an analyst average of closer to 9 percent). Looking ahead, Yu anticipates that gross profit margins will continue to rise as the year continues, averaging around 12% for the year.