© Reuters Morgan Stanley Obese on Li Auto (LI) as founder pushes for 30k gross sales in June
Morgan Stanley reiterated an Obese ranking and $40.00 value goal on Li Auto (NASDAQ:) after conducting retailer checks and talking with salespeople.
In keeping with Morgan Stanley’s newest retailer checks, Li Auto’s general foot visitors in flagship places in Tier 1 cities improved 16% MoM to a report YTD quantity in Might. The electrical automaker’s L7/L8 continues to achieve traction, regardless of friends’ aggressive mannequin launches, driving prospects to take a more in-depth take a look at Li Auto’s fashions for comparability.
In Might, the corporate’s retail conversion fee (the ratio of order consumption to foot visitors) remained spectacular at 8%, surpassing Li Auto’s historic common of 5-6% in 2022 and the business common of 4-5%. The elevated conversion fee was possible pushed by profitable take a look at drives/rides of the L7 Air and L8 Air fashions, in addition to the corporate’s distinct product positioning. These fashions particularly focused households and exhibited distinctive value efficiency in comparison with competing fashions from different firms.
Based mostly on Morgan Stanley’s chats with retailer salespeople, all of the fashions noticed a stable enhance in Might. The L7 mannequin was the most well-liked, making up 40-50% of complete orders, adopted by the L8 and L9 fashions, which every accounted for 25% of orders. The Li One additionally had double-digit development in Might as the corporate labored on promoting off stock. Among the salespeople even steered that Li Auto’s general orders may attain round 30,000 models in Might as they expanded their gross sales channels.
Analysts wrote in a word, “With ample order ebook and rising retailer footprints, the founding father of Li Auto continues to focus on 30k gross sales in June. Together with stable April and Might gross sales, Li Auto is poised to beat the excessive finish of 2Q steerage (76-81k) by 3k if June gross sales can attain 30k as guided, and underpins the corporate’s 40k month-to-month in late 2H.”
Shares of LI are up 1.91% in premarket buying and selling on Wednesday.
