Analysts at JPMorgan have reiterated a Neutral rating on PDD Holdings Inc. (NASDAQ:PDD) and cut the price target to $105 from $125 on May 28. The adjustment comes on the Chinese commerce giant delivering disappointing quarterly results. Its net profit fell 47% in Q1 2025, hurt by tariffs and stiff competition.
A financial analyst reviewing stock prices on a graph with a positive outlook.
While the company’s first-quarter revenue rose 10% to 95.67 billion yuan, it fell short of the 104.41 billion yuan analysts expected. It also marked the slowest top-line growth since 2022. Exacerbating the underperformance is that net profit fell to 14.74 billion yuan, missing consensus estimates of 26.12 billion yuan. Consequently, PDD margins plunged to 19% from 36%.
Analysts at JPMorgan expect PDD holding’s share price to consolidate until it releases Q2 2025 results in August. Similarly, revenue growth is expected to remain flat if trade tariffs stay in place, even though the Chinese marketplace could sustain growth.
JPMorgan analysts remain wary of the fact that PDD Holdings faces setbacks in its global ambitions. The Chinese company is exploring ways of scaling its Temu shopping platform, which has become a hit with budget-conscious customers in the US. However, escalating tensions with the US resulting in trade tariffs have already forced the company to raise prices on the platform.
PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. It operates the Pinduoduo platform and Temu, an online platform that enables merchants to streamline their manufacturing and operations.
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