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XPeng stock was down about 85% year to date coming into Friday trading.
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Shares for Chinese electric vehicle maker
XPeng
have just been hammered in 2022—and they dropped even more Friday after a once-bullish analyst said to sell the stock.
Citi
analyst Jeff Chung doubled-downgraded shares to Sell all the way from Buy. (Analysts typically go one ratings notch at a time, from Buy to Hold then from Hold to Sell and vice versa.)
His target price went to $3.18 a share from $27.87 a share, down an incredible 89%. Chung sees a lot of challenges ahead.
“We believe the company’s model cycle face serious challenges in [2023], as foreshadowed by its recent market-share loss on poor sales and order in-takes,” wrote Chung in his report.
His unit sales forecast is now 120,000 and 155,000 for 2023 and 2024, respectively. The Street consensus calls for about 150,000 and 250,000 for those years, respectively.
It’s a splash of cold water for investors who have already been through a lot. Coming into Friday trading,
XPeng
(ticker: XPEV) stock was down about 85% year to date for reasons including rising interest rates, which have dinged growth stock valuations, and geopolitical tensions, which have turned some U.S. investors off Chinese stocks.
Shares were down another 10% in Friday trading after the downgrade. The
S&P 500
and
Nasdaq Composite
were up 1.5% and 1.8%, respectively.
All the declines have
XPeng
shares trading for about 0.6 times estimated 2023 sales. EV makers typically trade for greater than 1 times sales because they are expected to grow. XPeng peers
NIO
(
NIO
…
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