Pinduoduo ($PDD) loses spot on Goldman Sachs’ conviction list

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Written on Mar 11, 2024

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Goldman Sachs removes Pinduoduo from its conviction list.
$PDD is scheduled to report quarterly earnings on March 18th.
Pinduoduo stock is currently down 25% versus its YTD high.

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Goldman Sachs removed PDD Holdings Inc (NASDAQ: PDD) from its “conviction list” on Monday. Shares of the online retailer are still in the green at writing.

Pinduoduo stock downgraded to neutral

The investment bank downgraded Pinduoduo this morning to “neutral” and trimmed its price target to $136 a share.

Goldman Sachs removed $PDD from its conviction list today citing unfavourable risk-reward. Pinduoduo stock remained on that list for just over three months during with it lost close to 23% in total.

Note that the firm’s new price target on shares of the retail giant based out of Shanghai, China still represents about a 20% upside from here.

At writing, $PDD is down 25% versus its year-to-date high in early January.

$PDD Pinduoduo is down 25% YTD because of technical weakness and FT article on the company temu subsidiary.

At 110$ Pinduoduo is below my 164$ fair value.

MY RATING: BUY ✅

EXPECTED RETURNS (10Y)
???? 22.2%/year (best scenario)
???? 13.5%/year (average scenario)
???? 4.2%/year… pic.twitter.com/gwvoBEUs6Y
— Natan (@nataninvesting) March 10, 2024

$PDD to report quarterly earnings on March 18^th

Goldman Sachs also cited “cross-border business landscape” and the fast-shifting policy as it downgraded Pinduoduo stock on Monday.

The firm sees H.R. 7521 or the Protecting Americans from Foreign Adversary Controlled Applications Act as a headwind for PDD Holdings Inc as well.

On the flip side, analysts at Jefferies upgraded shares of the company that owns Temu this morning to “buy” and raised their price target to $157 that suggests a whopping 38% upside from here.

Pinduoduo is scheduled to report its quarterly financial results on March 18^th. Consensus is for it to earn $1.44 a share versus 97 cents per share a year ago.