PDD Shares Fall 11% After Morgan Stanley Cuts Price Target to $129
PDD•Morgan Stanley cut its PDD price target from $148 to $129, still implying a 51.6% upside, after shares slid nearly 11% on disappointing Q1 results. PDD’s Q1 revenue of RMB 106.2 billion (up 11% YoY) missed forecasts, while net income fell 15% to RMB 12.5 billion and GAAP EPS came in at $1.38 versus $2.23 estimate.
1. Price Target Cut Triggers Sharp Sell-Off
Morgan Stanley reduced its price target on PDD from $148 to $129, still implying a 51.6% upside. In reaction, PDD shares dropped nearly 11% as investors digested weaker-than-expected quarterly results.
2. Quarterly Financial Performance Misses Estimates
In Q1, PDD generated RMB 106.2 billion in revenue, up 11% year-over-year but below consensus. Net income declined 15% to RMB 12.5 billion, and GAAP EPS of $1.38 fell short of the $2.23 forecast, while the online marketing segment grew just 2.5% versus a 7.9% estimate.
3. Analyst Outlook and Growth Considerations
Despite the near-term margin pressure, the revised price target still signals significant upside. Analysts point to PDD’s supply chain investments and first-party brand initiatives as potential long-term catalysts that could drive future earnings expansion.
