- The shares of Pinduoduo Inc (NASDAQ: PDD) have received an $80 price target from Citi. These are the details.
The shares of Pinduoduo Inc (NASDAQ: PDD) have received an $80 price target from Citi. And Citi analyst Alicia Yap upgraded Pinduoduo from a “Neutral” rating to a “Buy” rating.
Yap pointed out that following the share price following their Q3 2021 print, the shares were also further weakened along with global tech stocks sell-off.
“While we believe the rising interest rate risks to tech stock will remain an overhang and PDD will not be immune to macro and soft consumption trend, we view resilient user metrics, steady demand of value-for-money products and possible share gain in Duoduo Grocery likely to support improving service fee rate and sustainable profit trend thanks to tighter regulation of subsidies,” wrote Yap in a research note. “As PDD’s profitability trend is likely to sustain, we switch our valuation to earnings multiple from GMV/revs. We retain our TP of US$80, based on 28x 2023E EPS of US$2.86, set at 0.50x PEG to 57% 2021-24E earnings CAGR and implies about a 5x P/S on 2023E revs. Currently trading at 21x our 2023E EPS and with >30% ETR, we upgrade PDD to Buy/High Risk from Neutral/High Risk.”
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