Why XPeng Shares Soared Today

Chinese companies have been a point of interest for investors in recent days. Shares of companies doing business in China rose after the government announced new economic stimulus measures.

Manufacturer of electric vehicles (EV). XPeng (NYSE: XPEV) is a likely beneficiary of these support measures. But there are other reasons why investors are growing bullish on XPeng. That helped the stock jump as much as 14% Friday morning. As of 1:30 p.m. ET, XPeng shares pared some of that gain but held on to a 10% gain.

Tailwinds for the electric vehicle manufacturer

A new bullish interpretation of XPeng’s business has just arrived City Group analysts. The firm has raised its price target for the electric vehicle maker as it sees sales growth on the horizon. This should lead to better financial performance in the medium and long term.

Citi sees sales volumes nearly doubling by 2026 to more than 400,000 units. Interest is strong in Xpeng’s updated P7 sedan, which is due to be released soon and adze Rival of the Model 3 Mona M03, according to Citi. The electric vehicle manufacturer also plans to build a range of electric extended range vehicles (EREV) in 2025. These new vehicles include fossil fuel generators to increase the range of the electric battery.

The timing for these new offerings seems ideal. This week, China’s central bank made several moves to boost business investment and help the housing market. This included cutting interest rates on existing mortgages, as well as cutting the reserve requirement ratio for banks by 50 basis points.

China’s leadership followed the news by promising “necessary fiscal spending” to help meet its economic growth target of around 5 percent. The news gave investors more confidence that stronger economic growth would resume. This should benefit XPeng at an ideal time as its lineup gains traction. If this increase in sales is realized, better financial results will follow. That has investors bullish on the stock today.

Should you invest $1,000 in XPeng right now?

Before buying shares in XPeng, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and XPeng was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $756,882!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

The story continues

See the 10 stocks »

*The stock advisor returns as of September 23, 2024

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Howard Smith has positions in Tesla and XPeng. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Why XPeng Stock Soared Today was originally published by The Motley Fool