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Investing.com - Jefferies raised its price target on Vipshop Holdings (NYSE:VIPS) to $18.50 from $17.70 on Thursday, while maintaining a Buy rating on the Chinese online discount retailer. The stock, currently trading at $17.33, appears undervalued according to InvestingPro Fair Value calculations, with shares up nearly 26% year-to-date.
The price target increase follows Vipshop’s second-quarter results, which showed revenue and non-GAAP earnings in line with analyst expectations. The company’s midpoint guidance for third-quarter revenue came in 3% above market expectations. With a P/E ratio of 7.56 and an impressive financial health score rated as "GREAT" by InvestingPro, the company demonstrates strong fundamental value.
Vipshop reported that its number of active SVIP (Super VIP) customers grew 15% year-over-year during the second quarter. These premium members now contribute approximately 52% of the company’s online sales.
Jefferies expects Vipshop’s gross merchandise value (GMV) to maintain positive year-over-year momentum in the third quarter. The firm also anticipates the number of active customers will return to positive growth in the current quarter.
Despite the price target adjustment, Jefferies maintained its full-year assumptions for Vipshop largely unchanged, continuing to recommend a Buy rating for the stock.
In other recent news, Vipshop Holdings has been the subject of various analyst assessments and financial forecasts. The company is preparing to release its second-quarter earnings, with BofA Securities and Citi projecting a year-over-year decline in net revenue, aligning closely with consensus estimates. BofA expects a 4.0% decrease, while Citi anticipates a 4.5% drop. Despite these forecasts, Jefferies maintains a Buy rating on Vipshop, with a price target of $18.30, noting that the company’s first-quarter revenue and non-GAAP earnings exceeded expectations. Benchmark analysts, however, are cautious, maintaining a Hold rating due to a 5% revenue decline in the first quarter and a modest full-year revenue forecast. The company has seen a resurgence in apparel sales and an 18% increase in SVIP membership, which could positively impact future performance. Nonetheless, the management’s revenue guidance for the second quarter aligns with consensus estimates, indicating potential challenges ahead. Meanwhile, BofA has lowered its price target to $17.20, citing soft apparel demand and increased competition.
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