JPMorgan upgrades a China EV play that trades in the U.S.

JPMorgan thinks two new key models coming in the fourth quarter of this year could supercharge shares of XPeng . The bank upgraded the China-based electric vehicle maker to overweight from neutral. It also increased its price target for U.S.-listed shares to $11.50 from $8 per share. JPMorgan’s forecast implies more than 36% upside from Wednesday’s close. Shares have pulled back more than 42% in 2024 amid cooling demand for EVs around the globe. Despite a somewhat promising wave of investment from automakers across the globe to spur EV adoption, consumers have given companies a gut check, with some wishing they could go back to traditional gas powered cars . To be sure, XPeng does not sell any of its vehicles Stateside, and demand in China has been exceptionally higher compared to the U.S. XPEV YTD mountain XPeng YTD Because of this, JPMorgan analyst Nick Lai said XPeng could thrive moving forward thanks to the rollout of its Mona M03 and P7 plus sedans. He noted that these vehicles could nearly double the company’s overall vehicle delivery from the third to the fourth quarter. “Into 2025, our current estimate is that sales volume can further top ~300k units thanks to more new models, or 72% [year over year] from 180k in 2024, albeit visibility could be low considering the competition landscape,” Lai said. He also noted that shares could see an expanded growth runway on the heels of the new vehicles, something the stock has experienced before. When XPeng launched its G6 sports utility vehicle in in 2023, for example, the stock advanced roughly 30%, according to Lai. “A similar share price trend may take place toward year-end, but could prove tactical as the sustainability of potential share price appreciation is contingent on sales growth and margin, in our view,” Lai said.