Self-driving technology company WeRide has plenty of room to grow thanks to its lead in the global self-driving market, according to Morgan Stanley, which brought the company public last month to $15.50 a share. Analyst Tim Hsiao initiated research coverage of Guangzhou, China-based WeRide with an overweight rating and a $23 price target, implying a more than 25% upside for the stock from Monday’s close. WeRide was up 6% in early trading Tuesday to $19.43. WeRide offers a variety of driverless vehicles such as robobuses, robotaxis and robovans, has driverless licenses in the US, China, UAE and Singapore and is involved in testing and commercial activities in 30 cities. The company has partnered with Uber in the UAE, and Hsiao expects its robotaxi and robovans segments to achieve large-scale commercialization by 2026. Morgan Stanley estimates that the size of the autonomous driving market will grow to $1.745 billion in 2030 from $93 billion in 2025. WeRide L4+ is a pure play for global autonomous driving,” Hsiao wrote in a 38-page report on Tuesday. Level 4 autonomous driving describes when a vehicle can drive under most circumstances without a human driver, below the top Level 5 designation for a fully automated vehicle. Hsiao added that WeRide “can create greater operating leverage and synergies between products than its peers, given its diverse product offering.” To be sure, the threat of tighter regulation of driverless vehicles is a downside risk for the stock, and Morgan Stanley expects WeRide’s earnings and cash flow to be “volatile” in the near term, Hsiao noted. WRD ALL mountain WeRide shares since its IPO in October.—CNBC’s Michael Bloom contributed to this report.
