US Tiger Securities cuts Li Auto stock price target on weak margins

US Tiger Securities reduced its price target for Li Auto Inc. (NASDAQ: LI) stock from $22 to $16, while keeping a Buy rating. The current stock price is $12.23, down 28% year-to-date and nearing its 52-week low of $11.65. The downgrade comes after Li Auto’s second-quarter 2026 results, with weaker near-term volume and margin expectations.

Despite modestly exceeding expectations in deliveries and revenue, gross margins remain low due to increased selling, general, and administrative expenses, resulting in a wider-than-expected loss. Li Auto’s third-quarter guidance points to another soft quarter before the new product cycle can significantly impact the bottom line.

Analyst Bo Pei from US Tiger Securities made the rating update on Tuesday. In related news, Li Auto reported a 18% decline in vehicle deliveries for May compared to the same month last year, but cumulative deliveries reached 1,702,792 units as of the end of May. Other firms like Barclays and Macquarie have also adjusted their outlooks for Li Auto, with Barclays lowering its target to $14.00 and Macquarie upgrading the stock rating to Neutral.

Additionally, China approved the first standard for autonomous driving systems in 2027, and new energy vehicle sales in China saw a 7.5% year-over-year decline in May, though market share increased to 63%.