Li Auto (LI) Downgraded by J.P. Morgan Amid Profitability Concerns

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J.P. Morgan has downgraded Li Auto (LI) from Neutral to Underperform, forecasting a 10% sales decline and evaporating profits by 2026 due to increased competition and rising costs in the EV market. The price target was reduced by 22% to $14, following a 31% year-over-year drop in the automaker’s stock. The financial analysis reveals mixed performance with robust revenue growth but volatile earnings, and concerns regarding capital efficiency and potential financial stress despite a strong balance sheet.

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