Citi analysts opened a "30-day positive catalyst watch on Li Auto" (NASDAQ:LI), as they maintained a Buy rating and a $54.30 Price Target on the shares.
In their latest note on one of China's leading EV makers, the analysts reiterated that they view LI's "recent strong weekly shipment and potential sector recovery into Jul-23 as positive." As such, they highlight 4 key potentially positive catalysts to watch over the next 30 days:
- Positive insurance numbers: "Weekly insurance sales (June 5 - June 11) reported 8.4k units, and beat market expectation - We expect shipment to further accelerate over the next few weeks."
- Signs of broader sector recovery continuing into July: "Sector EV weekly insurance sales were tracking around 12% MoM, and beat market consensus - Full month sector run rate may reach >600k level; combining with exports, sector’s EV June wholesale may reach 700k units."
- Margins and Cashflow improvements: "Given strong growth momentum in sales volume, we expect Li Auto’s monthly run-rate could challenge 35k units in Jun-23E versus consensus of 30k level. Thanks to the sales ramp-up, we anticipate 2Q23E GPM of Li Auto to have potential to rise 3-4ppts QoQ with strong FC."
- New product launches: "We expect Li Auto to launch both BEV and EREV versions of MPVs rather than just BEVs alone going forward."
The analysts, who recently raised their Price Target to $54.30 from $51.50, reiterate a Buy rating on the shares and maintain a highly bullish tone over the company's near-term prospects.
Shares of LI are trading over 4% higher in pre-market on Wednesday, extending an over 50% gain YTD.