Goldman Sachs Starts Xpeng at Buy, Expects Rise in Margins and Overseas Volumes

Investing.com2023-07-12

Goldman Sachs initiated coverage on Chinese electric automaker, Xpeng Inc with a Buy rating and a 12-month price target of $18.10 as analysts expect Chinese auto OEMs’ overseas sales volume to rise from 2.7 million to 8.5M in 2022-2030E, driven by leading technology and product competencies of Chinese EV models.

In the near-term, Goldman Sachs expects to see the company’s vehicle delivery volume to regain momentum following the latest G6 model launch. Additionally, the analysts expect margins to improve on larger vehicle delivery scale together with battery pricing decline.

They wrote in a note, “We see the launch of G6 to help the company enhance market share – with entry price at Rmb210k, Rmb54k (20%) / Rmb73k (26%) lower than Tesla Model Y / BYD Tang EV, XPeng’s G6 presents strong advantages in areas such as long wheelbase, charging speed (800V fast charging), and leading smart features. Therefore, we expect G6, together with P7/P7i, to be major volume contributors going forward, driving a 62% CAGR in vehicle sales and market share gain from 2.1% to 3.7% over 2023E-2025E and leading to 4%-22% higher than Bloomberg consensus revenue estimates.”

Goldman Sachs models 151k vehicle sales in 2023, 5% higher than Visible Alpha consensus. In the longer-term, they expect XPeng’s leading position in NOA (navigation on autopilot) with strong R&D focus to provide further upside to its revenue growth and margin profile.

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Comments

  • Mr Mooney
    2023-07-23
    Mr Mooney
    Rate to buy on higher price and downgrade on bottom.... manipulation..  
  • AlanChong
    2023-07-12
    AlanChong
    Grab!😆
  • neo26000
    2023-07-12
    neo26000
    Dont you just love these guys? Tell you to buy after it has gone up a lot.
    • ICEsh00ter
      coz they hv no idea it's going up until everyone else has bought it up. 🤣
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