On Tuesday, Barclays adjusted its stock price target for Li Auto (NASDAQ:LI), a China-based electric vehicle manufacturer, moving it to $22 from the previous $25, while retaining an Equalweight rating for the stock. The revision follows Li Auto's first-quarter results, which revealed lower-than-expected deliveries and recent price reductions.
The company's delay in launching battery electric vehicles (BEVs) until the first half of 2025 was cited as a significant factor for the price target adjustment, as this postponement removes a crucial near-term growth opportunity for the company.
Li Auto's Q1 performance fell short of the company's original delivery guidance, contributing to the decision by Barclays to reassess the stock's value. The recent price cuts implemented by Li Auto add to the challenges faced by the company, which is navigating a competitive electric vehicle market.
The delay in the launch of Li Auto's BEVs to the first half of 2025 is a notable development, as it pushes back the introduction of a product line that could have spurred growth for the company in the near term. This delay has influenced Barclays' outlook on the stock's performance potential.
Despite these setbacks, Barclays continues to hold an Equalweight rating on Li Auto. This suggests that the firm views the stock's current valuation as in line with its peers, and it may reflect a cautious optimism about the company's long-term prospects despite the near-term hurdles.
The new stock price target of $22 represents a decrease from the previous target but indicates where Barclays believes the stock will move in the foreseeable future. Investors and market watchers will be keeping an eye on Li Auto's progress as it works towards the eventual launch of its BEVs and seeks to improve its delivery numbers in upcoming quarters.
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