XPeng Stock Sees a Downgrade and Price Target Cuts After Earnings. Wall Street Sees ‘Multiple Uncertainties.’

XPeng reported a second-quarter loss of about $372 million.


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Chinese electric-vehicle maker



XPeng

maker delivered second-quarter earnings that disappointed investors. Analysts weren’t impressed either.

On Tuesday,



XPeng

(ticker: XPEV) reported a loss of about $372 million. Wall Street was looking for a smaller loss of about $288 million. What’s more, the company said it expects to deliver about 30,000 vehicles in the third quarter, well below analyst projections of about 45,000.

Shares fell11% in Tuesday trading. Shares are down about 0.8% in early trading Wednesday, after Wall Street adjusted ratings and numbers following the earnings print.

Tuesday evening, Barclays analyst Jiong Shao downgraded XPeng shares to Hold from Buy. His price target went to $22 a share from $30. He is focused on weak delivery guidance, noting that the coming G9 SUV will be critical for the success of the company.

Citigroup analyst Jeff Chung didn’t change his rating, but he slashed his price target to $27.87 a share from $51.59 a share. He cited “multiple uncertainties, including the pandemic, consumption downgrade, and supply chain challenges” in his research report. Chung still rates share Buy, despite the 46% price target cut.

Overall, XPeng shares remain popular despite the Barclays downgrade. About 83% of analysts covering the company rate shares Buy. The average Buy-rating ratio for a stock in the


S&P 500

is about 58%.

The average analyst price target is down to about $35.50 a share. The average target price was almost $40 a share before the second-quarter earnings report.

The second-quarter earnings disappointment added to XPeng stock’s already difficult year. Coming into Wednesday trading, XPeng stock is down about 63% while the S&P 500 and


Dow Jones Industrial Average

have lost about 13% and 9%, respectively.

Higher inflation and interest rates have sapped some investor enthusiasm for high-growth stocks. XPeng qualifies as one of those. Sales are expected to grow at about 50% a year on average for the coming three years.

Supply-chain snarls have also affected the Chinese auto industry as have delisting concerns. U.S. regulators have threatened to delist U.S.-listed shares of Chinese companies that don’t meet certain accounting standards.

Write to Al Root at allen.root@dowjones.com

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