Shares of the Chinese electric vehicles (EVs) maker Li Auto (NASDAQ:LI) dropped about 6% in the pre-market session on March 21. The market responded negatively to management’s reduced delivery outlook for the first quarter.
Blaming lower-than-expected order intake, Li Auto stated that it now expects its vehicle deliveries for the first quarter of 2024 to be between 76,000 and 78,000. Earlier, the company projected delivery between 100,000 and 103,000 vehicles.
Li Auto’s leadership acknowledged operational challenges with its new model, MEGA. Further, Li Auto’s management said the company is moving away from prioritizing sales volume and competition. Instead, it will concentrate on leveraging its core strengths, particularly in creating value for its users. Moreover, it will focus on driving efficiency and restoring sustainable growth.
What is the Forecast for LI Stock?
Li Auto stock has gained nearly 45% in one year, reflecting higher deliveries and improving margins. However, the ongoing macro headwinds, reduced delivery outlook, and increased competition could pose challenges in the short term.
10 analysts cover Li Auto stock, and all recommend a Buy. Analysts’ average price target on LI stock is $56.71, implying a 66.40% upside potential from current levels.
It’s worth noting that ratings and price targets on LI stock were set prior to management’s revision of its delivery outlook. This raises the possibility that analysts might adjust their price targets downward for Li Auto stock.
