AutoHome, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Brian Gong from Citi maintained a Hold rating on the stock and has a $27.00 price target.
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Brian Gong’s rating is based on several factors impacting AutoHome’s current and future performance. The company’s expected financial results for the second quarter of 2025 are anticipated to align with market expectations, but challenges remain. The ongoing price war among original equipment manufacturers (OEMs) is likely to continue affecting advertising revenues, and the generation of leads is expected to stay weak due to difficult conditions for dealers. Additionally, while the online marketplace segment is growing through the expansion of offline stores, this growth might only partially offset weaknesses in other areas such as transaction and data products.
Looking ahead to the second half of 2025, there is potential for improvement in OEM advertising revenues due to easier year-over-year comparisons and possible government intervention to mitigate the price war. However, the momentum in lead generation is expected to remain subdued, and the company’s interim dividend might face delays pending government approval of Haier’s acquisition. Despite these challenges, AutoHome remains committed to its shareholder scheme, providing some reassurance about its dividend visibility. Given these mixed factors, Brian Gong has opted for a Hold rating, reflecting a cautious stance on the stock’s potential performance.