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