Morgan Stanley reiterated their Overweight rating and $23.10 price target on XPeng (NYSE:XPEV) following what analysts described as “a volatile start to the year”.
XPeng's H-shares experienced an 8% decline on Monday compared to the HSI's 2% drop.
Analysts at Morgan Stanley suggest that this downturn can be linked to onshore investors reducing their positions. These investors had been fervently purchasing XPeng in the latter half of 2023 due to the company's significant advancements in autonomous driving technology.
However, with XPeng's recent short-term events, such as the XNGP upgrade and X9 launch, already factored into a minor surge at the end of December, today's correction in the automotive sector prompted investors to take their profits.
Morgan Stanley highlighted that the recent selloff presents a favorable chance for investors to establish new positions. However, certain investors might opt to wait until after the Chinese New Year for more solid data points, such as the delivery of X9 vehicles and order intake.
“Following the X9 launch and update on aggressive XNGP deployment over the past week, we think investors will gradually refocus on near-term sales and order trajectory,” wrote analysts in a note.
Shares of XPEV are down 2.64% in afternoon trading on Monday.