XPeng stock up 15% as regulators propose easing Covid restrictions; Is XPEV a buy?

XPeng (NYSE: XPEV) stock finished trading on the closing bell on Friday, November 4, at $7.88, a 14.87% increase on the day; meanwhile, over the last five sessions, the Chinese electronic vehicle (EV) giant is up 20.12%.

Interestingly, XPeng appeared to have benefitted from the news, which suggested Chinese officials proposed readjusting harsh anti-pandemic measures. On top of that, before the market opened, Bloomberg also reported that the first round of US audits of Chinese businesses had been completed early, suggesting a favorable trend.

On Friday, the announcement helped rally numerous Chinese equities, notably the EV industry, which has seen production slowed by lockdowns in recent weeks. According to Nasdaq statistics, investors responded positively to the news in the premarket on November 7, sending the stock price up 4.7% (+0.37), at the time of publication.

XPEV chart and analysis

In the last month, XPEV has been trading in the $6.18 – $10.18 range, and the stock is currently trading in the middle of this range, so some resistance may be found above. In particular, a resistance zone ranging from $7.89 to $7.94 is formed by a combination of multiple trend lines and important moving averages across various time frames.

Although volume has been considerably higher in the last couple of days, XPEV is currently trading below all daily moving averages. Near the lower end of its 52-week range, which is not a good sign, although the S&P 500 Index is also trading in the lower part of its yearly range, so the EV stock is not an exception.

Price movement has been a little bit too volatile to find a nice entry and exit point, so XPEV does not present a quality setup at the moment. Nevertheless, Wall Streets analysts rate the stock a ‘strong buy,’ with price predictions for the next 12 months seeing a potential increase of 388.83% from the current trading price of $7.88 to a potential price of $44.79 per share. 

Furthermore, out of the 11 TipRanks analysts covering XPEV, eight have a ‘buy’ rating, two have a ‘hold’ rating, and just one with a sell rating based on its performance over the last three months.

XPeng completes $133.5 million million debut issuance

With the announcement on November 4 that XPeng Inc.’s subsidiary, Guangzhou Xiaopeng Automotive Financial Leasing Co., Ltd., had completed its debut issuance of RMB964 million (approximately US$133.5 million) in automobile leasing carbon-neutral asset-backed securities (“ABS”) on the Shanghai Stock Exchange, it would appear that positive news has been circulating around the stock recently. 

Notably, ABS was met with a welcoming attitude from Chinese institutional investors, leading to historically low coupon rates for automotive leasing ABS among China’s up-and-coming automakers.

The firm also demonstrated a test flight of the roadable eVTOL flying car designed and produced by an XPeng subsidiary, XPeng Aeroht, which had just completed its first worldwide public flight with its X2 vehicle.

With XPeng flexing its creative muscles in vehicle flying and robotics, and the company continuing to make inroads in innovations, the EV automaker may be worth keeping a watch on as China’s zero-covid policies begin to soften.

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