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A Barclays analyst cut the rating on XPeng (NYSE:XPEV) to Equal Weight from Overweight with a $22 per share price target, down from $30.
While the analyst notes that Q2 results were “solid” his focus is on “much weaker than expected Q3 guidance on vehicle deliveries.” XPEV said it expects to deliver between 29,000 to 31,000 electric vehicle (EV) units while analysts were looking for 45,865, as per data compiled by Bloomberg.
The weak Q3 forecast now pushes the spotlight on the success of G9, which will now be “critical in both near and longer terms,” the analyst adds.
“We consider the execution risks heightened with the company’s outlook heavily depending on the success of G9, which has not even been fully unveiled let alone test-driven by consumers. We also highlight that G9 is the first flagship SUV for XP as its current two flagship models (P7 & P5) are both sedans. Considering the risks, we move to the sidelines and wait for confirmation of G9 success,” the analyst explained in a client note.
Hence, the analyst expects EV inventors to focus on the conversion rate of G9 pre-order to firm orders in the coming weeks.
XPeng shares are down over 60% YTD.
