Hong Kong-based Li Auto, Inc. (HK:2015) reported record sales for September, boosting expectations for strong growth in the electric vehicle (EV) sector in the final quarter of 2024. The solid performance in September, coupled with recent stimulus measures from the Chinese government, has pushed the share price higher by over 40% in the past 30 days. Nonetheless, Li Auto stock is still down 24% year-to-date. Moving forward, analysts maintain a cautious stance on Li Auto shares amid potential slowdown concerns and intense competition in the EV space.
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Li Auto is a Chinese automobile manufacturer that offers a range of smart electric vehicles.
Li Auto Delivers Impressive Sales in September
Li Auto delivered 53,709 vehicles in September 2024, reflecting a year-over-year growth of 48.9%. This also marked an increase of 11.6% from the previous month. Until September, the company delivered a total of 341,812 vehicles in 2024.
The impressive numbers were mainly driven by the growing market share of NEVs (new energy vehicles). Li Auto held more than 17% of the market share in this segment. Additionally, the higher sales were credited to a consistent increase in orders for the company’s Li L series and Li MEGA vehicles.
Analysts Adopt Cautious Outlook on Li Auto Shares
Following the September update, analyst Eugene Hsiao from Macquarie raised his price target on Li Auto shares from HK$98 to HK$129, predicting 21% upside potential. However, he downgraded the rating on Li Auto stock to a Hold from Buy on valuation concerns after the recent rally. Macquarie is bullish on the L series, which continues to perform strongly, but thinks that the lack of new model launches in the last quarter of 2024 could pose challenges.
Moreover, Macquarie stated that Li Auto might encounter pressure from price competition, potentially affecting profit margins. It could also see a shift in demand from extended-range electric vehicles (EREVs) to fully electric models. Earlier in August, Li Auto postponed its plan to launch pure electric SUV models until the first half of the next year due to the shortage of fast charging networks.
Meanwhile, analyst Jeff Chung from Citi reiterated a Hold rating and raised the price target on Li Auto stock to HK$113.8 from HK$98. Chung expects a modest upside of 6.4% in the share price.
Is Li Auto a Good Stock to Buy?
On TipRanks, 2015 stock has been assigned a Moderate Buy rating, backed by five Buy and three Hold recommendations. The Li Auto share price target is HK$112.55, which is 5.18% above the current price level.
