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Investing.com - Macquarie has raised its price target on Li Auto (NASDAQ:LI) to $21.00 from its previous target while maintaining an Underperform rating on the Chinese electric vehicle maker. Currently trading at $23.26 with a market capitalization of $23.56 billion, InvestingPro analysis suggests the stock is undervalued despite falling over 26% in the past six months.
The investment firm cited slowing demand for Li Auto’s L-series extended-range electric vehicles (EREVs) as a key concern, noting that the company’s third-quarter volume and sales guidance missed consensus expectations. Despite these concerns, Li Auto maintains strong fundamentals with a healthy 20.5% gross margin and 10.75% revenue growth over the last twelve months.
Macquarie pointed out that the guidance implies flat monthly sales in August and September despite the recent launch of the new i8 model, suggesting challenges in maintaining sales momentum.
The firm also mentioned that Li Auto provided few new details about its upcoming i6 launch in September, which will face "intense competition" in the battery electric vehicle (BEV) SUV segment within the RMB 200,000-300,000 price range.
Macquarie has lowered its fiscal year 2026 volume estimate by 4% to reflect slower EREV demand, while maintaining its price target based on a fiscal year 2026 price-to-earnings ratio of 15x.
In other recent news, Li Auto reported its second-quarter 2025 earnings, which significantly missed forecasts. The company posted an earnings per share (EPS) of $1.37, falling short of the expected $1.81, and revenue of $30.24 billion, which was below the forecasted $33 billion. Despite this earnings miss, Li Auto’s stock experienced a rise in pre-market trading. Additionally, Li Auto issued guidance for the third quarter of 2025, projecting vehicle deliveries between 90,000 and 95,000 units, indicating a year-over-year decline of 38% to 41%. This guidance led BofA Securities to downgrade the stock from Buy to Neutral and lower its price target to $26.00. Barclays also adjusted its price target for Li Auto to $24.00, citing the soft delivery outlook. Meanwhile, Tiger Securities lowered its price target to $28.00 but maintained a Buy rating, noting that the second-quarter results were largely in line with expectations after previous guidance adjustments. These developments reflect the mixed sentiment surrounding Li Auto’s recent performance and future prospects.
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