PDD Holdings Inc. (PDD) shares continued their downward trajectory on Tuesday, following a massive single-day drop on Monday after the company released its second-quarter earnings report. The stock plummeted over 28% on Monday after PDD warned that increased competition and other challenges could impact its short-term profits and future growth.
Chairman and co-CEO Lei Chen acknowledged the company’s recent success but highlighted the challenges ahead, stating, “While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead.”
Goldman Sachs analyst Ronald Keung attributed the negative market reaction to heightened expectations and management’s comments about slower revenue growth. The stock had rallied approximately 20% since late July in anticipation of strong second-quarter results.
Following the earnings release, several analysts updated their coverage of PDD stock. Citigroup analyst Alicia Yap downgraded the stock from Buy to Neutral and lowered the price target from $194 to $120. Benchmark maintained its Buy rating while lowering the price target from $230 to $185. Barclays kept PDD Holdings at Overweight but reduced the price target from $224 to $158. Macquarie analyst Ellie Jiang downgraded the stock from Outperform to Neutral. B of A Securities analyst Joyce Ju maintained a Buy rating and lowered the price target from $206 to $170. Lastly, Jefferies kept PDD at Buy and lowered the price target from $193 to $151.
Will PDD Stock Go Up?
To determine the potential for PDD Holdings to trade higher from current levels, it’s crucial to consider analyst forecasts. Wall Street analysts currently have an average 12-month price target of $159 for PDD Holdings. The highest target is $185, while the lowest is $120. Among analysts covering PDD Holdings, 5 have positive ratings, one has a neutral rating, and none have negative ratings. Over the past month, 7 analysts have adjusted their price targets.
It’s important to remember that stock prices fluctuate. The average stock market return is about 10% per year. PDD Holdings is currently down 33.98% year-to-date. The average analyst price target suggests potential for upside in the future.
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PDD Price Action:
As of Tuesday’s publication, PDD Holdings shares were down 3.1% at $96.84.
