Deutsche Bank said investors have an attractive entry point into Li Auto after the recent sell-off. Analyst Edison Yu upgraded the Chinese electric vehicle maker’s U.S.-listed stock to buy from hold, while also lowering its price target by $4 to $41. His new target would mean a 46.4% surge from Monday’s closing price next year. The stock has fallen about 28% since the end of November. This performance was worse than that of the Kingsoft CSI China Internet ETF (KWEB), which fell about 14% during the same period. LI KWEB 3M mountain Li Auto and ETF, 3 months The analyst said that although Li has a “best-in-class” management team, its performance is still poor. Lee also has a track record of meeting ambitious volume and cost targets, he added. Yu noted that the first quarter should show some weakness. But he said new models and improvements to existing vehicles should help restore sales and profits starting in the second quarter. Yu said after the stock price fell, “a compelling pattern will emerge in the coming quarters, driven by strong product pipelines and further supported by attractive valuations of top electric vehicle players.” Li Keqiang’s stock price fell This comes as investors become increasingly wary of companies with large operations in China due to concerns about consumer conditions. Chinese stocks are also generally under pressure. Despite rising 3.2% on Tuesday, ending a six-day losing streak, the Shanghai Composite Index is still down more than 6% so far this year. Yu noted that he used a lower price-to-earnings ratio for Li Auto given the widespread downgrades of Chinese ADR stocks and global electric vehicle makers. In fact, Yu is still considered relatively conservative on Wall Street. While analysts have a buy rating, their price targets have risen nearly 83% on average, according to FactSet. Lee’s shares rose more than 6% in early trading on Tuesday. The stock is down nearly 20% year to date, giving back some gains after rising 83.5% in 2023.
