Things are tough these days for Chinese EV start-up XPeng . Barclays thinks the challenges will persist and recommends investors sell Xpeng stock.
Thursday, Barclays analyst Jiong Shao downgraded XPeng (ticker: XPEV) to Sell from Hold. His price target went to $6 a share from $8.
First quarter results were disappointing, he wrote. And the outlook for the second quarter was below Wall Street expectations. Shao isn’t sure new models, such as the G6 SUV, which ships to customers this summer, can turn things around.
Wednesday, XPeng reported first-quarter sales of just under $500 million, down about 46% compared with the year-ago period. Wall Street was looking for first-quarter sales of about $700 million.
For Q2, XPeng projects sales of about $700 million. Wall Street was looking for just under $1 billion. XPeng generated $1.1 billion sales in the second quarter of 2022.
Growth has been a struggle recently. XPeng expects to deliver 21,000 to 22,000 vehicles in the second quarter. April deliveries were 7,079 units, leaving about 7,200 units a month in May and June.
XPeng delivered 34,422 units in the second quarter of 2022. XPeng’s best month of deliveries was 16,000 units in December 2021.
XPeng stock is down 5.8% in premarket trading Thursday, at $8.15, following the bearish call. S&P 500 and Nasdaq Composite futures are up 0.6% and 1.9%, respectively. The market is higher after Nvidia (NVDA) results Wednesday evening. The chip maker’s sales outlook for the current quarter was much better than expected.
Overall, 59% of analysts covering Xpeng stock still rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 53%. About 16% of analysts now rate shares Sell. The average Sell-rating ratio for S&P stocks is less than 10%.
The average analyst price target is about $9 a share.
Coming into Thursday, XPeng shares are down about 88% from their record high of $74.49 reached in November 2020.
Write to Al Root at [email protected]