Shares of PDD Holdings (PDD 4.03%) climbed 4% to a fresh 52-week high on Thursday following several bullish analyst notes regarding the parent company of Chinese online retailer Pinduoduo.
PDD enjoyed price target upgrades from several analyst firms between yesterday after the market closed and early this morning. J.P. Morgan raised its target to $180 from $120, Bernstein raised its target to $170 from $120, Citigroup raised its target to $173 from $153, and Benchmark raised its target to $190 from $140. Shares of PDD stock closed today at just above $147 per share.
Wall Street is celebrating PDD’s latest quarter
The timing of the upgrades is no coincidence; shares also rallied yesterday as several other analysts upgraded their respective ratings on PDD stock after the company’s third-quarter 2023 results absolutely crushed expectations. PDD’s quarterly revenue soared 94% year over year to 68.8 billion yuan, or roughly $9.4 billion, while net income climbed 47% to 15.5 billion yuan, or 11.61 yuan per American depositary share. Leading up to the report, most analysts were only modeling earnings of 8.39 yuan per share on revenue closer to 54 billion yuan.
What’s next for PDD shareholders?
Wall Street analysts aren’t the only ones praising PDD for its relative strength. According to a subsequent report from Bloomberg, Alibaba Group co-founder Jack Ma issued an internal memo calling for his company to “correct its course” as other Chinese rivals gain momentum. Ma even singled out PDD, praising decisions taken by the company in recent years that have fueled its growth. Alibaba, for its part, has struggled to drive revenue growth in recent quarters amid broader economic uncertainty, political strife, and a strategic decision to break up the business into six smaller segments earlier this year.
In the meantime, PDD is obviously operating from an enviable position of strength in China. With no signs of slowing down, I think the slew of analyst upgrades driving its share price higher are on point, and see no reason PDD stock can’t continue rallying from here.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
