China-based electric vehicles (EV) manufacturer Li Auto (LI) has revised its delivery outlook for the third quarter of 2021. Following the news, shares of the company declined 4.2% in early trade on Monday.
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The company expects to deliver about 24,500 vehicles in the third quarter. Li Auto had previously expected to deliver 25,000 to 26,000 units.
The company has lowered its outlook mainly because of the impact of COVID-19 in Malaysia. Li Auto said, “The production of chips dedicated for the company’s millimeter-wave radar supplier has been severely hampered.”
Also, the company said that the recovery of the chip supply has been slower than expected. Nevertheless, Li Auto seeks to work closely with its supply chain partners to minimize the impact of the chip shortage. (See Li Auto stock charts on TipRanks)
On August 31, Needham analyst Vincent Yu assigned a Buy rating to the stock and a price target of $37 (upside potential of 27.2%).
The analyst noted, “The 2021 Li One enjoyed strong consumer demand after launch, but its delivery growth has been limited by an industry-wide shortage of chips due to Covid, and Li has no visibility as to when it will improve. That said, Li’s scheduled capacity ramp, offline store expansion, fast-charging network development, and 2022-2023 EREV/BEV model rollouts are all on track.”
Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on 4 Buys and 1 Hold. The average Li Auto price target of $38 implies upside potential of about 30.6% from current levels.
TipRanks data shows that financial blogger opinions are 100% Bullish on LI, compared to the sector average of 74%.
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