PDD Holdings price target lowered to $128 from $160 at Benchmark

Benchmark analyst Fawne Jiang lowered the firm’s price target on PDD Holdings (PDD) to $128 from $160 and keeps a Buy rating on the shares. The company’s Q1 report revealed domestic e-commerce growth roughly in line with expectations along with international revenue that came in below forecast, though such a miss was “largely anticipated amid ongoing tariff tensions,” the analyst tells investors. What “surprised the market and triggered yesterday’s sharp stock reaction,” however, was the significant margin miss as PDD ramped up investment in merchant support considerably, the analyst added. Given management characterized this spending as part of a longer-term investment cycle focused on strengthening the merchant ecosystem, the margin compression and elevated strategic outlays, the firm expects material downward earnings revisions, but it feels that much of the negative sentiment “appears priced in” at the current valuation, the analyst says.