iQIYI stock price target raised to $2.30 from $2.00 at Citi

Investing.com - Citi has raised its price target on iQIYI (NASDAQ:IQ) to $2.30 from $2.00 while maintaining a Buy rating on the Chinese streaming platform’s shares. According to InvestingPro data, the stock currently trades at $1.89, with analyst targets ranging from $1.50 to $2.75.

The price target increase comes despite Citi lowering its second-quarter 2025 revenue expectations for iQIYI, citing content schedule delays, weak advertising performance amid soft macroeconomic conditions, low seasonality for dramas, and lower content distribution revenue.

Citi slightly revised up its bottom-line forecast to reflect smaller-than-expected content costs due to delayed launches and models second-quarter adjusted operating profit to be largely at breakeven. iQIYI is expected to report its second-quarter 2025 results around mid-August.

The firm noted that entering the third quarter of 2025, two long dramas have been performing well on the platform, while a micro drama titled "How Are You" has broken records on iQIYI and achieved widespread internet popularity, showing initial positive results of the company’s micro drama strategy.

Citi’s new $2.30 price target is based on a 12x price-to-earnings multiple on fiscal year 2026 estimated earnings per share, unchanged from its previous valuation methodology.

In other recent news, iQIYI reported first-quarter revenue of RMB7.19 billion ($1.11 billion), surpassing analyst expectations of RMB7.1 billion, marking a 15% year-over-year increase. Despite the revenue beat, the company’s adjusted earnings per share were RMB0.19, falling short of the projected RMB0.30. This indicates ongoing challenges in converting revenue growth into profit. Benchmark analyst Fawne Jiang maintained a Hold rating on iQIYI stock, noting growth challenges and a forecasted flat revenue for the second quarter, which could result in a 3-4% year-over-year decline. Jiang cited slower content adaptation and macroeconomic factors as contributing issues. Meanwhile, CLSA downgraded iQIYI’s stock rating from Outperform to Hold, reducing the price target to $1.70 from $2.40. This decision followed iQIYI’s first-quarter results, which aligned with the downgraded forecasts, and concerns over content expenditures affecting profit recovery. Both analyst firms emphasize the need for iQIYI to demonstrate clear execution capabilities and competitive positioning in the market.

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