Jefferies says this Chinese electric vehicle company could rally 25%

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Jefferies upgraded Xpeng shares to buy following the company's joint partnership deal with Volkswagen.

Joint development plans with Volkswagen mark a new chapter for Xpeng , Jefferies says. The firm upgraded its rating on Xpeng shares to buy from hold. It also increased its price target on shares to $25.30 from $7.80, which implies 25.1% upside from Thursday's close. Shares were up an additional 7.6% Friday during premarket trading. Under the deal, the two companies will develop two midsize battery-electric models, which will be branded as Volkswagen cars and be sold in China.

The partnership marks "the start of China [original equipment manufacturers] exporting technologies to foreign players [and] will help Xpeng to increase its brand image globally," analyst Johnson Wan wrote in a Thursday note. Wan added that Xpeng's sales momentum is on an uptrend and raised his 2023-2024 sales volume forecasts, adding that the company is well-positioned to enjoy its first-mover advantage in assisted driving development.

 

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