Citi analyst Jeff Chung maintained a Hold rating on Li Auto (LI – Research Report) on March 14 and set a price target of $34.30.
Jeff Chung has given his Hold rating due to a combination of factors impacting Li Auto’s current and future performance. The company’s fourth-quarter results were mostly in line with expectations, but the vehicle gross profit margin fell slightly short due to incentives and changes in product mix. This suggests some pressure on profitability, which is a concern for investors.
Additionally, Li Auto’s management is focusing on extending the life cycle of its existing models by upgrading the ADAS system, which is seen as a challenging strategy. While the company plans to launch new BEV models and expand its sales network, there is uncertainty in achieving significant growth in the near term. The anticipated decline in average selling prices and the competitive landscape in ADAS technology further contribute to the cautious outlook, justifying the Hold rating.
In another report released yesterday, Nomura also downgraded the stock to a Hold with a $31.00 price target.
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