Buy Li Auto 'MEGA Dip,' Analyst Says: EV Maker Anticipates 3,000 Unit Deliveries A Month

Opportunity Knocks for Li Auto Investors: Analyst Predicts 3,000 Unit Deliveries Monthly

The Recent Turmoil at Li Auto

Li Auto Inc (LI) witnessed a significant drop in premarket trading, as reports surfaced about declining electric vehicle (EV) deliveries in China.

Market turbulence hit the company’s stock, likely triggered by lower-than-expected order intake for MEGA, its flagship family MPV, according to Bernstein.

The Analyst’s Perspective: Eunice Lee maintained an Outperform rating and a price target of $52.50 for Li Auto.

The Investment Thesis: Despite a 30% rally post strong fourth-quarter earnings, the recent decline has created an enticing buying opportunity for investors, Lee noted.

With the stock down 20% since Friday, the analyst views this as a favorable entry point for investors.

Lee highlighted concerns regarding the order book for MEGA, which has only garnered around 4,000 non-refundable orders to date, indicating sluggish demand compared to market expectations.

Management had set monthly delivery targets of at least 5,000 units, with some sources suggesting even higher internal goals of over 8,000 units.

Lee forecasted monthly deliveries to be in the range of 2,000 to 3,000 units, reflecting a cautious outlook on the company’s performance.

Stock Performance: Li Auto shares fell by 4.3% to $36.24 in the latest trading session.

Image: Li Auto

5 Stocks Our Experts Predict Could Double In the Next Year

By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.

See also <html> <head> <title>Tesla Vs. Ford: Bernstein Analysts Evaluate Auto Stock Performance</title> </head> <body> <article> <h2>The Shifting Automotive Landscape</h2> <p>The auto industry, a longstanding economic powerhouse, stands at a crossroads as it navigates significant technological advancements and shifts in consumer behavior. The rise of electric vehicles (EVs) has been a focal point, driven by environmental concerns and government mandates. However, the burgeoning realm of high-tech subscription services may wield a more profound influence on the industry's trajectory.</p> <h2>Electric Evolution vs. Connectivity Revolution</h2> <p>While EVs dominate headlines, the integration of software, connectivity, and automobiles is carving out a new market space. These services, offering features like online mapping, remote vehicle control, and autonomous driving, present a lucrative revenue stream for manufacturers and an innovative customer experience. Amidst these transformative waves, the fundamental investment principle of seeking value in stocks remains paramount.</p> <h2>The Analyst Battle: Tesla's Triumphs</h2> <p>Bernstein analysts have engaged in a showdown between Tesla and Ford to determine the superior investment choice in the current market landscape. Tesla, under the visionary leadership of Elon Musk, has emerged as a standout player in the EV realm. With a market cap exceeding $560 billion, Tesla's pioneering role in mass EV production and profitability cements its position as an industry leader.</p> <p>Tesla's profitability streak, commencing in 2020 and marked by consistent quarterly revenues over $20 billion, showcases its manufacturing prowess and customer appeal. Beyond vehicle quality, Tesla's emphasis on connectivity as a standard feature sets it apart. Offering services like music streaming, real-time traffic data, and premium connectivity options underscores Tesla's commitment to innovation and customer experience.</p> <p>Despite recent production and delivery setbacks in Q1 2024, Tesla's revenue reached $21.30 billion, accompanied by notable earnings per share. While concerns linger around competition in the Chinese autonomy space, Tesla's strategic moves and product roadmap signal continued growth potential.</p> <h2>Ford's Fortunes and Electric Endeavors</h2> <p>Shifting focus to Ford Motor Company, a stalwart in the automotive landscape, a legacy defined by iconic models like the F-series trucks and Mustang. Ford's dominance in the pickup market and muscle car segment has been unyielding, with the F-150 pickup retaining its status as a top-selling vehicle in the US for years.</p> <p>While Ford has ventured into EV territory with electric variants of its flagship models, profitability in the EV segment remains elusive. Encouraging sales figures, exemplified by a 129% year-over-year increase in EV sales, indicate progress. However, challenges persist as Ford strives to position its Model E EV line for sustained success.</p> <p>In the showdown between Tesla and Ford, Bernstein analysts have painted a divergent picture. While Tesla's trajectory garners optimism with its technological edge, Ford's established reputation and EV efforts present a blend of opportunities and hurdles. As investors assess their options in the shifting automotive landscape, the debate between new disruptors and old titans rages on.</p> </article> </body></html>The Rise and Resilience of Ford: A Financial Analysis