Gold prices just lower; monthly gains on track
Investing.com - Barclays has reduced its price target on Li Auto (NASDAQ:LI) to $24.00 from $31.00 while maintaining an Equalweight rating on the Chinese electric vehicle maker. According to InvestingPro data, Li Auto, currently trading at $23.25, appears undervalued with a market capitalization of $23.52 billion and a P/E ratio of 20.77x.
The firm cited Li Auto’s soft third-quarter delivery guidance of 90,000-95,000 vehicles, representing a roughly 16% quarter-over-quarter decline, despite the recent launch of the company’s first battery electric vehicle (BEV) SUV, the i8. Despite these challenges, InvestingPro analysis shows the company maintains strong financial health with more cash than debt and a healthy current ratio of 1.87x.
Barclays noted that excluding the i8, which began deliveries on August 20 and is expected to contribute 8,000-10,000 units in Q3, Li Auto’s extended-range electric vehicle (EREV) portfolio would see deliveries drop almost 50% year-over-year or 25% quarter-over-quarter.
The firm highlighted Li Auto’s significant changes in sales strategy, team organization, training, and store locations, but emphasized that the upcoming i6 model needs to become a best-seller as it’s designed to be a volume product competing with Tesla’s Model Y in the low 200,000 RMB price range.
Barclays also pointed to Li Auto’s operational de-leveraging process, noting the company needs to maintain or increase R&D and sales and marketing spending despite revenue pressure, with profitability potentially reaching only break-even in Q3 after 11 consecutive profitable quarters.
In other recent news, Li Auto reported its Q2 2025 earnings, which showed a notable miss in both earnings per share (EPS) and revenue compared to analyst forecasts. The company posted an EPS of $1.37, significantly lower than the expected $1.81, resulting in a surprise of -24.31%. Additionally, revenue was reported at $30.24 billion, falling short of the anticipated $33 billion, marking a surprise of -8.36%. Despite these results, Tiger Securities maintained a Buy rating on Li Auto but lowered the price target to $28 from $33. This adjustment follows the company’s earlier reduction in delivery guidance for the quarter. Tiger Securities described the earnings results as "largely in line with expectations." These developments reflect ongoing investor interest and strategic considerations surrounding Li Auto’s future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.