Selected stock price target news of the day - May 30, 2023

:allBy Matthew Otto

Pinduoduo’s Q1 2023 Earnings Beat Expectations, announces Investment in R&D and ’10 Billion Ecosystem Initiative’

PDD Holdings, also known as Pinduoduo, has announced Q1 2023 financial results that surpassed analysts’ expectations. The key financial highlights include:

58% year-on-year increase in total revenues to RMB37,637.1 million (US$15,480.4 million),
222% increase in operating profit.
212% rise in net income.

The company’s EPS of RMB6.92 was notably higher than the expected RMB4.47, and revenues also exceeded the consensus estimate.

The increased revenues were primarily due to growth in online marketing services and transaction services, despite a rise in total costs and operating expenses. The company also plans to increase resources for research and development and has announced a ’10 Billion Ecosystem Initiative’ for quality merchants.

Finally, the company’s cash position has improved significantly, with net cash from operating activities of RMB1,338.0 million (US$194.8 million), compared to a net cash usage in Q1 2022, and an increase in cash, cash equivalents, and short-term investments.

Analysts Upgrade Pinduoduo’s Price Targets Following Q1 Results

Benchmark’s Fawne Jiang reaffirms a Buy rating, boosting the price target from $106 to $125.
Bank of America Securities’ Joyce Ju continues with a Buy rating, elevating the price target from $95 to $97.
Citigroup’s Alicia Yap also sustains a Buy rating on PDD, escalating the price target from $100 to $105.
Jefferies’ Thomas Chong retains a Hold rating, augmenting the price target from $75 to $79.
Goldman Sachs’ Ronald Keung enhanced the PDD target price to $97.

The Chinese Stock had lost 25% this year, with all analyst optimism expressed in March as shown on the stock price target chart proved to be not warranted.

Apple has unveiled a multiyear, multibillion-dollar deal with Broadcom for the development of 5G radio frequency components, including FBAR filters, and advanced wireless connectivity components. These components will be produced in several key US manufacturing and technology hubs, such as Fort Collins, Colorado. The deal is expected to bolster employment, with Apple already supporting over 1,100 jobs at Broadcom’s Fort Collins facility and 2.7 million jobs nationwide. This agreement is part of Apple’s $430 billion commitment made in 2021 to invest in the US economy over five years.

Analysts Raise Price Targets for Broadcom Following Apple’s Multibillion-Dollar Deal

Ambrish Srivastava of BMO Capital reaffirms its Outperform rating and raises the price target from $750 to $890.
C Muse of Evercore ISI Group continues its Outperform rating, increasing the price target from $725 to $850.
John Vinh of Keybanc retains its Overweight rating, escalating the price target from $720 to $820.
Rick Schafer of Oppenheimer maintains its Outperform rating and boosts the price target from $720 to $800.
Christopher Rolland of Susquehanna upholds its Positive rating and elevates the price target from $690 to $785.
Timothy Arcuri of UBS enhances the price target for Broadcom to $925.
No new stock recommendations were made on Apple.

Analysts Vivek Arya of BofA, Christopher Rolland of Susquehanna, Rick Schafer of Oppenheimer and Cody Acree of Benchmark have all upgraded their price targets in advance in the last month to the $800 range.

Big Lots has Wider Than Expected Q1 Loss and Dividend Suspension Amid Inflation and Economic Slowdown

Big Lots‘ reported for Q1 2023 a wider loss than expected and suspended its dividend. Inflation and a slowing economy are reported to have impacted lower-income customers. Big Lots (BIG) reported an adjusted loss of $3.40 per share for the quarter vs expected $1.78 per share. This marks the company’s fifth consecutive quarter of posting an adjusted loss. Revenue fell 18% YoY to $1.1 billion, missing Wall Street projections of $1.2 billion.

The decline in revenue was propelled by an 18% drop in comparable-store sales, a larger decrease than the 13.2% anticipated by analysts. CEO Bruce Thorn commented on the challenging situation, noting that their lower-income customers have been impacted by inflation, smaller tax refunds, increased interest rates, and shaken confidence due to banking failures. The company also experienced slower furniture sales due to product shortages following the unexpected closure of its largest vendor, United Furniture Industries.

Big Lots is targeting over $100 million in savings in selling, general and administrative (SG&A) expenses in 2023 and has suspended its dividend. The company also confirmed no share repurchases were executed during the quarter. For Q2 2023, Big Lots expects comparable-store sales to remain in the high-teens range as in Q1, while anticipating slightly improved gross margins, but remaining in the low-30s range due to heavy discounting of seasonal merchandise.

Big Lots Faces Downgrade from Analysts following Q1 Results; Price Targets Reduce

Deutsche Bank analyst Krisztina Katai maintains a Hold and lowers the price target from $8 to $6.
Loop Capital analyst Anthony Chukumba maintains a Hold and lowers the price target from $14 to $6.
Telsey Advisory Group analyst Joseph Feldman maintains a Market Perform and lowers the price target from $9 to $6.

Looking at AnaChart we see that most analyst have kept their price targets with potential upside despite the ongoing decline, recent standout is Krisztina Katai of Deutsche Bank who adjusted her stock forecast in advance in the beginning of the year.