BofA Raises XPeng Price Target, Sees More Upside Ahead For EV Stock

Xpeng Inc - ADR XPEV was one of 2020's hottest electric vehicle stocks, and one Wall Street analyst said Thursday that investors can expect the XPeng rally to continue in 2021.

The XPeng Analyst: BofA Securities analyst Ming Hsun Lee reiterated a Buy rating on XPeng and raised the price target from $43 to $51.10.

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The XPeng Thesis: BofA's price target hike comes after XPeng completed a $2.8-billion rights issue earlier in December. Following the fundraising round, Lee said XPeng has the cash it needs to fund its growth and plenty of near-term catalysts ahead.

XPeng launched a free charging program in 24 cities in China back in September and has already expanded that program to 100 cities, the analyst said.

XPeng is looking to double that total to 200 cities in 2021, and Lee said the fast-charging network will help build the company’s brand loyalty and increase its long-term sales growth.

In addition, XPeng has several key product launches expected in 2021.

The analyst is projecting the company’s third model, a sedan, will hit the market in the fourth quarter of 2021. In addition, the company is expected to launch an upgraded version of the G3 and a lithium iron phosphate battery version of the G3 at a lower price point.

Lee is projecting 61% compound annual revenue growth for XPeng through 2025.

"We remain positive on XPeng’s long-term share gain and improving profitability."

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Benzinga’s Take: There are plenty of reasons for investors to be excited about XPeng’s future, but the stock is already up 125.2% in the last three months and trading at 86 times sales.

As is the case with many of the hottest EV stocks, some tremendous long-term success is already priced into the stock at today’s levels.

Photo courtesy of XPeng.