China Renaissance Upgrades XPeng Outlook to Buy

A recent report indicates that China Renaissance has upgraded XPeng's outlook from Hold to Buy, citing a potential 17.55% upside in its stock price. With significant projected revenue growth of 74.75%, investor sentiment appears positive despite a non-GAAP EPS forecast of -4.08.

Date: 23-11-2024

AI Rating: 7

The report outlines a significant upgrade for XPeng by China Renaissance, raising its outlook from Hold to Buy. This upgrade is driven by a projected price target increase of 17.55%, which suggests that analysts are optimistic about XPeng's future performance in the stock market. The current closing price of HK$47.35 shares positions it for potential gains.

Importantly, the expected annual revenue for XPeng has been reported at 66,074MM, indicating a remarkable 74.75% growth. This level of revenue growth is a strong positive signal for the company, suggesting robust business momentum and potential for market expansion.

However, the projected non-GAAP EPS is reported at -4.08. While this figure is negative, it must be viewed in context; it appears that analysts are prioritizing revenue growth over short-term earnings losses, pointing towards a belief that XPeng's investments will pay off in the future.

Institutional interest is mixed, with a reported decrease of 9 funds in ownership, or 7.69% in the last quarter. Nevertheless, the average portfolio weight dedicated to XPeng increased by 22.58%, indicating that while some institutions are diversifying out, those remaining are more committed. Overall, the total shares owned by institutions rose by 1.48% to approximately 87.36 million shares, showcasing continued faith among certain investors despite the challenges.

Overall, the increase in revenue projections juxtaposed with a negative EPS suggests that XPeng is in a growth phase that may not yet reflect positively in earnings but has established sufficient investor interest and potential for future upside.

Stocks: XPEV