Deutsche Bank's Edison Yu's team raised their price target on Li Auto by $5 to $32 with a Hold rating in a research note sent to investors on Monday.
The team said this is based on 5x 2022E sales to reflect more favorable investor sentiment. Previously, the team's valuation estimate for Li Auto was based on 4.5x 2022E sales.
Li Auto is expected to report second-quarter earnings later this month, and previously known data showed it delivered 17,575 units in the second quarter, up from 12,579 units in the first quarter and higher than the company's guidance of 14,500-15,500 units.
In their latest research note, Yu's team updated their model for Li Auto. The team expects the company to report second-quarter revenue of RMB 5.03 billion, higher than the RMB 4.64 billion consensus of analysts in a Bloomberg survey.
The team expects Li Auto's gross margin to be 19 percent in the second quarter, higher than the analyst consensus of 18.6 percent in the Bloomberg survey.
Based on these, the team expects Li Auto's second-quarter EPS to be RMB 0.05, compared to the analyst consensus of RMB -0.02 in the Bloomberg survey.
Li Auto reported on Sunday that it delivered 8,589 Li ONE units in July, the first time it has delivered more than 8,000 units in a single month, up 251.3% year-over-year and 11.4 percent from June.
Yu's team expects that Li Auto management's guidance for third-quarter deliveries will likely exceed 26,000 units and revenue guidance will likely be in the range of RMB 7.5 billion to RMB 8 billion.
"Management's target of 10,000 deliveries by September looks very achievable now in our view," the note reads.
The team raised their estimate for Li Auto's full-year deliveries this year by 10,000 units to 85,000 and raised their forecast for 2022 deliveries by 10,000 units to 115,000.
The team raised their revenue estimates for Li Auto to RMB 25.3 billion this year from RMB 22 billion previously and to nearly RMB 35 billion in 2022 from about RMB 32 billion.
Li Auto closed up 8.9 percent to $33.39 on Friday, with Deutsche Bank's price target implying a 4 percent downside.
Li Auto delivered record 8,589 units in July, up over 250% from a year ago
