HSBC Securities slashes price target on Li Auto Inc. [LI] – find out why.


Li Auto Inc. [NASDAQ: LI] traded at a high on 08/01/22, posting a 3.84 gain after which it closed the day’ session at $34.10. The company report on August 1, 2022 that Li Auto Inc. July 2022 Delivery Update.

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Li Auto Inc. (“Li Auto” or the “Company”) (Nasdaq: LI; HKEX: 2015), a leader in China’s new energy vehicle market, today announced that the Company delivered 10,422 Li ONEs in July 2022, up 21.3% year over year. The cumulative deliveries of Li ONE have reached 194,913 since the vehicle’s market debut in 2019.

“Today, the 200,000th Li ONE rolled off the production line at our Changzhou manufacturing base. It took us just 986 days to reach the production milestone of 200,000 Li ONEs, once again setting a record speed among China’s emerging NEV manufacturers following our historic speed in reaching the 100,000-unit mark. Li ONE is also the first domestic branded premium model priced above RMB300,000 in China to achieve this production milestone. As a premium smart electric SUV, Li ONE has emerged as one of the top choices of large size SUVs for family users in China, owing to its product strengths attracting strong user endorsement. Meanwhile, our second model, Li L9, a flagship smart SUV for families, has received positive feedback from our users since its launch on June 21. It has accumulated over 50,000 orders, among which non-refundable orders confirmed for the model exceeded 30,000. We welcome everyone to visit our retail stores to test drive our Li L9 and enjoy the flagship driving experience empowered by our self-developed range extension and chassis systems, as well as our self-developed autonomous driving system, Li AD Max,” commented Yanan Shen, co-founder and president of Li Auto.

The results of the trading session contributed to over 17460838 shares changing hands. Over the past one week, the price volatility of Li Auto Inc. stands at 5.49% while the volatility over the past one month is 5.66%.

The market cap for LI stock reached $35.57 billion, with 964.87 million shares outstanding and 853.00 million shares in the current float. Compared to the average trading volume of 12.19M shares, LI reached a trading volume of 17460838 in the most recent trading day, which is why market watchdogs consider the stock to be active.

What do top market gurus say about Li Auto Inc. [LI]?

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for LI shares is $44.78 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on LI stock is a recommendation set at 1.70. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

HSBC Securities have made an estimate for Li Auto Inc. shares, keeping their opinion on the stock as Buy, with their previous recommendation back on April 04, 2022. While these analysts kept the previous recommendation, China Renaissance raised their target price to Buy. The new note on the price target was released on March 24, 2022, representing the official price target for Li Auto Inc. stock. Previously, the target price had yet another raise to $38, while Barclays analysts kept a Overweight rating on LI stock.

The Average True Range (ATR) for Li Auto Inc. is set at 2.15, with the Price to Sales ratio for LI stock in the period of the last 12 months amounting to 7.27. The Price to Book ratio for the last quarter was 5.35, with the Price to Cash per share for the same quarter was set at 6.90. Price to Free Cash Flow for LI in the course of the last twelve months was 25.95 with Quick ratio for the last quarter at 3.80.

How has LI stock performed recently?

Li Auto Inc. [LI] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -1.45. With this latest performance, LI shares dropped by -10.99% in over the last four-week period, additionally plugging by 42.26% over the last 6 months – not to mention a rise of 2.13% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for LI stock in for the last two-week period is set at 46.35, with the RSI for the last a single of trading hit 42.35, and the three-weeks RSI is set at 49.92 for Li Auto Inc. [LI]. The present Moving Average for the last 50 days of trading for this stock 32.95, while it was recorded at 33.42 for the last single week of trading, and 29.30 for the last 200 days.

Li Auto Inc. [LI]: Deeper insight into the fundamentals

Operating Margin for any stock indicates how profitable investing would be, and Li Auto Inc. [LI] shares currently have an operating margin of -3.77 and a Gross Margin at +20.82. Li Auto Inc.’s Net Margin is presently recorded at -1.19.

Return on Total Capital for LI is now -2.44, given the latest momentum, and Return on Invested Capital for the company is -0.80. Return on Equity for this stock declined to -0.91, with Return on Assets sitting at -0.65. When it comes to the capital structure of this company, Li Auto Inc. [LI] has a Total Debt to Total Equity ratio set at 24.66. Additionally, LI Total Debt to Total Capital is recorded at 19.78, with Total Debt to Total Assets ending up at 16.37. Long-Term Debt to Equity for the company is recorded at 17.85, with the Long-Term Debt to Total Capital now at 14.32.

Reflecting on the efficiency of the workforce at the company, Li Auto Inc. [LI] managed to generate an average of -$32,554 per employee. Receivables Turnover for the company is 123.69 with a Total Asset Turnover recorded at a value of 0.55.Li Auto Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 3.80 and a Current Ratio set at 3.90.

Earnings analysis for Li Auto Inc. [LI]

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for LI. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Li Auto Inc. go to 13.21%.

Insider trade positions for Li Auto Inc. [LI]

There are presently around $7,853 million, or 28.90% of LI stock, in the hands of institutional investors. The top three institutional holders of LI stocks are: BLACKROCK INC. with ownership of 29,895,083, which is approximately 3.648% of the company’s market cap and around 0.30% of the total institutional ownership; TIGER GLOBAL MANAGEMENT LLC, holding 19,791,714 shares of the stock with an approximate value of $674.9 million in LI stocks shares; and VANGUARD GROUP INC, currently with $517.74 million in LI stock with ownership of nearly 1.177% of the company’s market capitalization.

Positions in Li Auto Inc. stocks held by institutional investors increased at the end of August and at the time of the August reporting period, where 138 institutional holders increased their position in Li Auto Inc. [NASDAQ:LI] by around 42,312,940 shares. Additionally, 120 investors decreased positions by around 35,136,004 shares, while 55 investors held positions by with 152,831,040 shares. The mentioned changes placed institutional holdings at 230,279,984 shares, according to the latest SEC report filing. LI stock had 41 new institutional investments in for a total of 4,573,967 shares, while 38 institutional investors sold positions of 6,636,815 shares during the same period.