Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Morgan Stanley bullish as XPeng announces price cuts

Published 01/17/2023, 07:40 AM
Updated 01/17/2023, 07:52 AM
© Reuters Morgan Stanley bullish as XPeng (XPEV) announces price cuts
XPEV
-

By Michael Elkins

Morgan Stanley reiterated an Overweight rating and $12.00 price target on XPeng Inc (NYSE:XPEV) after the company announced Tuesday that it will cut the prices of the G3i, P7, and P5 by RMB20K-36K. This announcement follows recent price cuts by Tesla (NASDAQ:TSLA) and Huawei AITO.

Part of the XPeng cut comes from a RMB20K promotion at stores from 4Q22. Therefore, the actual transaction prices of the G3i and P5 remain intact despite the MSRP cut. The P7 gained a more aggressive price cut of up to RMB36K, implying an additional RMB10K-16K price cut to the incumbent P7 on top of the RMB20K discount at store level since last quarter.

With the price cuts, there is a potential for downside to the electric vehicle maker's 1Q margin.

Morgan Stanley analysts wrote in a note, "As the new procurement price of battery has yet to kick in, XPeng's 1Q23 GM would likely hit a trough with such MSRP adjustments. Order resurgence may take time, with car transactions set to slow this week as Lunar New Year draws near. Further volume upside will hinge on XPeng's new models – revamped P7 and B-Class SUV – launched in March and 2Q respectively."

Shares of XPEV are down 2.9% in pre-market trading on Tuesday.

 
 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.