Li Auto Inc (NASDAQ: LI) has been a disappointment for shareholders over the past three months but a Deutsche Bank analyst is convinced the story moving forward will be a different one.
Li Auto stock has upside to $41Edison Yu upgraded the electric vehicles company this morning to “buy”. His $41 price target suggests a near 50% upside on its previous close.
The analyst is bullish on Li Auto stock partially because it has the “best-in-class” management team.
He recommends owning shares of the Chinese company also because it is known for beating pompous targets for volume and cost.
Just last week, Li Auto said it delivered 31,165 vehicles in January – up more than 100% versus last year. The EV stock is currently down about 35% versus its 52-week high.
Li Auto's CEO gives NIO Power credit for its high-quality infrastructure and industry leadership. $NIO $Li pic.twitter.com/RtYrKvq6ht
— Jason (@Jas0nYu) February 6, 2024What else could benefit Li Auto stock?Edison Yu agreed that signs of weakness in Li Auto Inc may persist through the first quarter.
But he’s convinced that volume and margins will pick up from the second quarter as the Nasdaq-listed firm launches new models and makes improvements to the existing ones. His research note reads:
There’s a compelling set-up in the coming quarters driven by a robust product pipeline, further supported by an attractive valuation for a top tier EV player.
The bullish call on Li Auto stock arrives ahead of its Q4 earnings print scheduled for the final week of February. Consensus is for it to earn 36 cents a share versus 4 cents per share a year ago.
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