Investing.com– Citi hiked its price targets on two Chinese electric vehicle makers, forecasting stronger sales on resilient domestic conditions, despite broader headwinds for the Chinese economy.
Citi raised its price target on Xpeng Inc (NYSE:XPEV) to $10.30 from $8.90 and maintained a Neutral rating on the stock. Citi hiked its price target on Li Auto Inc (NASDAQ:LI) to $25.50 from $21.60, also keeping the stock at Neutral.
Xpeng’s U.S. shares closed at $10.70 on Tuesday, while Li closed at $24.72.
The brokerage forecast higher sales for both firms, citing the upcoming launch of the Xpeng P7 and a robust product pipeline going into 2025. Citi also forecast a smaller loss for Xpeng over the next two years.
For Li Auto, Citi expects sales momentum to continue after a beat in July-August sales, and also raised its sales and profit forecasts for the firm.
Citi said both stocks reflected a fair level of valuations, and that risks and rewards on both were balanced.
Chinese EV makers remained resilient even after the European Union, the U.S. and Canada imposed steep import tariffs on the sector earlier this year.
But given that domestic demand makes up a bulk of the sector’s sales, the import duties were expected to have a limited impact on overall sales. Of the three countries, only the EU has a sizeable amount of Chinese EV imports.
