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Investing.com - Citi has reiterated its Neutral rating and $27.00 price target on Autohome Inc. (NYSE:ATHM) ahead of the company’s second-quarter 2025 earnings report, scheduled for July 30. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score and trades at an attractive P/E ratio of 14.4x.
The investment bank expects Autohome’s top-line and earnings results to be largely in line with consensus estimates, despite ongoing challenges in the automotive market. Citi notes that OEM advertising continues to be impacted by price wars, while lead generation remains weak amid worsening conditions for dealers.
Autohome’s online marketplace business could be increasingly driven by expanding offline stores, which might offset weakness in transaction-to-processing (TTP) and data products, according to Citi’s analysis. The bank also observed that government intervention in the fierce competition among OEMs might ease the price war in the coming months.
Revenue declines in OEM advertising might narrow in the second half of 2025 due to easier year-over-year comparisons, Citi suggests. The bank has fine-tuned its earnings estimates while maintaining its $27 price target.
Citi also noted that Autohome might need to delay its interim dividend pending government approval of Haier’s acquisition and approval from the new board.
In other recent news, Autohome Inc. is preparing to release its first-quarter 2025 financial results on May 8. Benchmark analysts have maintained a Hold rating on the company. Analyst Fawne Jiang from Benchmark has revised revenue forecasts for Autohome, now projecting a year-over-year decline of 10.5% in Q1 revenue, a downward adjustment from the previously estimated 1.8% decrease. This revision is attributed to anticipated challenges in the media services and lead generation sectors. The rapid expansion of electric vehicles, which saw a 47% year-over-year increase in the first quarter, is exerting pressure on internal combustion engine automakers. Despite a 13% year-over-year growth in passenger vehicle sales, increased promotional activities have impacted the profitability of original equipment manufacturers. This has resulted in reduced advertising budgets, particularly affecting media brand spending. These developments are crucial for investors to consider as they evaluate Autohome’s financial outlook.
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