New Street downgrades PDD on lack of estimate upside

New Street downgraded PDD Holdings (PDD) to Neutral from Buy with an unchanged price target of $120 post the Q2 report. The stock in premarket trading is down 1% to $127.37. The company’s Q2 revenue came in below New Street’s expectatoins and it cautioned that profitability could continue to fluctuate in the coming quarters, the analyst tells investors in a research note. The firm says PDD is willing to accept lower profits to reinvest in its platform. New Street sees limited upside to estimates due to “intense” competition in the company’s domestic market and regulatory uncertainties overseas.