Li Auto Inc. (NASDAQ: LI) debuted on Wallstreet less than a year ago and has since seen an incredible surge in investor confidence. The stock has gained 39.40% since its listing on the NASDAQ. In the Q1 earnings, we saw Li Auto record 12,579 vehicle deliveries which was slightly lower than their Q4 performance. However, the company did see major revenue growth YOY, up 319%. With so many questions to be answered on Li Auto and the upcoming Q1 earnings, this article will breakdown everything investors need to know about the Li Auto stock forecast.
Table of contents
What are analysts saying about Li Auto stock?
The 12 month price targets from larger institutions include coverage from Bank of America, Morgan Stanley, Goldman Sachs and Deutsche Bank. The more recent price targets include coverage from analyst Fei Fang at Goldman Sachs, who set the 12 month price target to an impressive $60 a share and set a conviction buy rating. Across the board of 11 Wallstreet analysts the average 12 month price target is $38.52 a share according to MarketBeat data. This suggests an average upside potential of 85% according to analysts. The more recent targets from these institutions on Li Auto is listed below:
- Needham & Company 3/17/2021 – analysts initiated coverage with a 12 month price target at $37 a share and a buy rating. This is an upside of 77% from the current trading price. The target was released after a gradual sell-off across the EV sector, with many Chinese EV stocks falling below expected values.
- Morgan Stanely 1/28/2021 – analysts boosted their 12 month price target from $26 to $49 a share. This suggests an upside potential of 135% from the current trading price. The analysts have also listed an overweight rating on Li Auto, suggesting the Morgan Stanley is confident LI will outperform within the EV sector.
- Bank of America 1/6/2021 – analyst Ming Hsun Lee at BoA listed a buy rating and set the 12 month price target at $42.00 a share.
- The Goldman Sachs Group 12/1/2020 – listed an conviction buy rating on Li Auto and set the price target from $20.60 to $60 a share (188% upside potential at the time of coverage). The price target impact on this coverage was high and saw Li Auto surge after the release.
What these 12 month forecasts mean for investors?
In summary, the data provided by direct institutional coverage of Li Auto does hint a strong positive sentiment moving into 2022. The general consensus amongst “smart money” institutions is bullish, with the average 12 month price target far exceeding the current trading price. In comparison to its industry competitors in China, NIO’s average Price Target suggests a 41% upside whilst Xpeng holds a 83% upside. From the targets alone, Li Auto holds the greatest upside according to analysts price target averages.
Revenue forecasts for 2022 and beyond
In addition to positive price targets, the revenue forecasts for 2021/22 also illustrate a bull case for investors. Firstly, the large margin for growth in the Chinese EV space has driven the demand for Li Auto deliveries.
Looking ahead, the average revenue forecast for the 2021 annual year is $2.94 Billion USD according to Yahoo Finance data. This would represent a 101.9% increase in its revenue performance for 2020. Furthermore, more bullish analysts suggest revenue could reach as high as $3.45 Billion USD in 2021 if strong delivery expectations can be met.
In addition, Li Auto expects to deliver 14,500 and 15,500 vehicles in the next quarter. This guidance expects Li Auto to break the companies quarterly delivery record. The record deliveries expected in Q2 are expected to generate between US$609.0 million and US$651.7 million according to their Q1 guidance summary. This outlook despite current semi-conductor chip shortages are bullish signs for shareholders.
“Against the backdrop of a once-in-a-century shift in the automotive industry to smart electric vehicles, the fourth quarter capped off a year of significant growth for our company. We delivered 14,464 Li ONEs during the quarter, up 67.0% on a quarter-over-quarter basis. With 32,624 vehicles delivered to our users in 2020, Li ONE became the best-selling new energy SUV of the year in China.”Mr. Xiang Li, founder, chairman, and chief executive officer of Li Auto,
The institutions are backing Li Auto and its 2022 forecasts
Firstly, there are some very large institutions that have taken a piece of the pie from Li Auto holdings. Large institutions with stake in Li Auto include include UBS Asset management, Morgan Stanley, BlackRock and JP Morgan & Chase. UBS Asset Management recent doubled their position in Li Auto, now holding $69.5 Million(as of 31/03/21). In addition, Morgan Stanley also boosted their position by 10% (as of 31/03/21). Investors should pay close attention to changes in quarterly holdings from these institutions. Hence, large swings in these holdings can give investors a good understanding into how these analysts are viewing the outlook on the company.
Evaluating Li Auto’s stock forecast moving into 2021
In conclusion, Li Auto has provided investors an opportunity to enter the growing EV market in China. Furthermore, the sentiment from analysts remains bullish, especially considering the more recent buy ratings from Morgan Stanley and BoA. In addition, the substantial growth in deliveries is another positive sign that the business is gaining market share in China. However, recent volatility in the EV market is something that will likely continue to influence Li Auto stock in 2021/22.
Written by Tyger Fitzpatrick
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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