Market Analysis
Li Auto Inc (LI) witnessed a significant drop in premarket trading driven by a decline in electric vehicle (EV) deliveries within China.
Evaluation of Recent Developments
The recent downturn in Li Auto’s stock can be attributed to weaker-than-expected order intake for its cutting-edge flagship family MPV, MEGA, as reported by Bernstein.
Analyst’s Position
Analytical Insight: Eunice Lee, maintaining an optimistic perspective, kept Li Auto rated as Outperform with a price target of $52.50.
Investment Thesis
Despite a 30% surge post-strong fourth-quarter earnings and upbeat 2024 prognostications, Li Auto’s shares have dipped by 20% lately, offering a tempting entry point as per Lee’s analysis.
Although the exact order book status for MEGA remains undisclosed, murmurs in the market indicate approximately 4,000 non-refundable orders thus far, which falls short despite being five days post-launch.
Management’s stated goal of a minimum 5,000 monthly deliveries contrasts with whispers in the supply chain citing an internal target exceeding 8,000 units. Lee speculates that actual monthly deliveries might settle at 2,000-3,000 units.
Stock Performance
Current Status: Li Auto shares witnessed a 4.3% decline, closing at $36.24 by the latest check on Thursday.
Image Source: Li Auto
