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Chinese electric vehicle stocks are under pressure after the recent earnings showed the extent of the ongoing slowdown. Li Auto (LI) stock plunged by more than 17% on Wednesday, bringing the 12-month collapse to 55%.
Li Auto on Wednesday reported a sharp decline in profit in the second quarter as the Chinese carmaker reported a surge in costs as it cut prices due to intense competition.
The car manufacturer reported adjusted earnings per share of about 10 cents, above the 9 cents expected by Wall Street.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
The EV market is growing, but at a slower pace, partly due to Tesla's (NASDAQ:TSLA) influence on the overall sector.
The latest trading day saw Li Auto Inc. Sponsored ADR (LI) settling at $21.35, representing a +1.04% change from its previous close.
Li Auto Inc. is expected to report Q2 earnings on August 28th, before the market opens with investors closely watching for updates on margins and delivery forecasts. Management sharply cut its 2024 delivery expectations from 800,000 in January to 480,000 by June, reflecting significant market challenges. The company's strong balance sheet and profitability position it as a compelling, yet cautious, investment in the Chinese EV market.
Initiating coverage on Li Auto with a "Buy" rating, an undervalued stock with the potential to navigate challenges in the EV industry. Li stock plunged due to revised delivery guidance, margin compression, and negative sentiments for Chinese stocks, but was oversold and poised for recovery. A strong balance sheet with a cash buffer of $13.7 billion and positive operating cash flows since 2020.
Bloomberg New Energy Finance increased its estimates for China's "cash for clunkers" subsidies. China decided to double its "cash for clunkers" subsidies last month after instituting the program in April.
BEIJING, China, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Li Auto Inc. (“Li Auto” or the “Company”) (Nasdaq: LI; HKEX: 2015), a leader in China's new energy vehicle market, today announced that it will report its unaudited financial results for the second quarter of 2024 before the U.S. market opens on Wednesday, August 28, 2024.