VLKAF - Xpeng sheds 13% after UBS warns Volkswagen G6 upside is already factored in

2023-07-31 10:20:52 ET

XPeng ( NYSE: XPEV ) fell on Monday after UBS lowered its rating to Neutral from Buy on its view the upside from the Volkswagen ( OTCPK:VLKAF ) partnership and G6 momentum is already factored into the share price.

"While the VW collaboration will proceed over the next three years, the company remains vulnerable in a fiercely competitive market and needs to recover its profitability," warned analyst Paul Gong.

UBS assigned a price target of $23 to XPEV based on a 2.5X 2024 price-to-sales multiple. That valuation is higher than what UBS assigned to Nio ( NIO ) due to its leading technology capabilities in electric vehicles and autonomous driving in China.

Shares of XPeng ( XPEV ) moved down 12.70% in premarket trading to $20.35 vs. the 52-week trading range of $6.18 to $25.91. Volume on XPEV was above normal activity during the first 45 minutes of trading. Short interest on XPEV stands at about 9.5% of the total float. The relative strength index and moving averages are both at bullish levels.

XPeng ( XPEV ) is on Seeking Alpha's Catalyst Watch for the week, with the company due to report on July deliveries on August 1.

More on XPeng:

• XPeng: Volkswagen Partnership Is A Game Changer (Rating Upgrade)
• Growth metrics on XPeng
• Recent options trades on XPeng
• Seeking Alpha's Quant Rating for XPeng

For further details see: