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On Tuesday, CFRA analysts upgraded Li Auto (NASDAQ: NASDAQ:LI) stock rating from Strong Sell to Hold. The analysts also raised the price target to $30 from $15, reflecting Li Auto’s resilient performance in the first quarter. According to InvestingPro data, Li Auto’s stock has demonstrated remarkable strength with a 55% return over the past year and currently trades near its 52-week high of $33.12.
The upgrade is based on Li Auto’s net income growth of 9.4% year-over-year, reaching CNY647 million. The company also returned to operating profitability with CNY272 million, compared to a loss in the previous year. This improvement is attributed to cost discipline, with operating expenses down 14% year-over-year, and stable gross margins of 20.5% despite seasonal challenges. InvestingPro analysis reveals the company maintains strong financial health with a current ratio of 1.87 and holds more cash than debt on its balance sheet, suggesting robust operational efficiency.
The analysts increased their 2025 earnings per share (EPS) estimate to CNY10.07 from CNY9.66. This revision considers Li Auto’s strong execution and profitability in the near term. However, they lowered the 2026 EPS estimate to CNY13.01 from CNY14.68, citing anticipated challenges from aggressive battery electric vehicle (BEV) investments and ongoing pricing pressures in the premium segment.
Li Auto’s strategic moves, including the launch of the Li i8 and VLA Driver ADAS, are expected to impact future earnings. The company faces increased research and development costs, with Q1 R&D expenses at CNY2.5 billion and a growing retail presence of over 500 stores. The Hold rating reflects a balance between the company’s operational resilience and the challenges posed by heightened capital demands and competition.
In other recent news, Li Auto reported notable developments that have captured the attention of investors and analysts alike. The company’s first-quarter 2025 results showed a gross profit and GAAP net profit exceeding Goldman Sachs’ estimates by 6% and 21%, respectively, driven by increased vehicle sales. This performance led Goldman Sachs to raise its price target for Li Auto stock to $35.30, maintaining a Buy rating. Meanwhile, Bernstein analysts reiterated an Outperform rating with a $33.00 target, reflecting optimism about the company’s refreshed product lineup and guidance for the second quarter.
Li Auto’s revenue for the first quarter increased by 1.1% year-over-year to RMB 25.9 billion, with a non-GAAP net profit of RMB 1 billion. Barclays (LON:BARC) maintained an Equalweight rating with a $31.00 target, noting the company’s resilience in vehicle margin despite offering discounts. Jefferies adjusted its price target to HK$132.10 while keeping a Buy rating, emphasizing the significance of upcoming model releases like the i8 and i6.
The company is gearing up for the launch of its i8 and i6 models, which are expected to enhance its market position in the competitive electric vehicle sector. Li Auto’s management has confirmed the release timeline for these models, with the i8 set to roll out in July and the i6 in September. As Li Auto continues to innovate and expand its product lineup, investors are keenly watching the potential impact on the company’s performance in the latter half of 2025.
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