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Investing.com - Morgan Stanley has raised its price target on Vipshop Holdings (NYSE:VIPS) to $16.00 from $15.00 while maintaining an Equalweight rating on the stock. Currently trading at $16.96, VIPS is approaching its 52-week high of $17.94, with InvestingPro analysis suggesting the stock may still be undervalued.
The adjustment comes as Vipshop guided for third-quarter 2025 revenue growth of 0-5% year-over-year, with a net profit margin expected between 6.5-7%. The company reported that user growth, including new user acquisition, has returned to a positive trajectory, which Morgan Stanley views as favorable for second-half 2025 top-line performance. InvestingPro data shows the company maintains strong financial health with an overall score of 3.25/5, labeled as "GREAT."
For full-year 2025, Morgan Stanley projects Vipshop’s total revenue will decline 1% year-over-year, with non-GAAP net profit reaching approximately 9 billion yuan, implying an 8.4% net profit margin. The company currently trades at an attractive P/E ratio of 9.16x, significantly below many peers in the Broadline Retail industry.
The firm raised its non-GAAP net profit estimates for Vipshop by 3% for 2025, 5% for 2026, and 7% for 2027, citing resilient top-line growth and disciplined cost control measures implemented by the company.
The new $16 price target implies a 6.4x price-to-earnings multiple based on 2025 estimated non-GAAP earnings, which Morgan Stanley considers fair given Vipshop’s projected 4% earnings compound annual growth rate from 2025 to 2028.
In other recent news, Vipshop Holdings reported second-quarter results with revenue and non-GAAP earnings aligning with analyst expectations. The company’s midpoint guidance for third-quarter revenue exceeded market expectations by 3%. Despite this positive outlook, BofA Securities adjusted its price target for Vipshop to $17.20 due to soft apparel demand, while maintaining a Buy rating. Jefferies, on the other hand, increased its price target to $18.50, citing growth in the company’s SVIP customer base. Citi maintained a Neutral rating with a $17.00 price target, noting a 4.5% year-over-year decline in second-quarter net revenue. Benchmark analysts held a Hold rating, expressing caution about the full-year 2025 outlook, despite a resurgence in apparel sales and an 18% increase in SVIP membership. Jefferies also maintained a Buy rating with an $18.30 target, highlighting that Vipshop’s first-quarter revenue met expectations and non-GAAP earnings surpassed them. Analysts noted that Vipshop’s Gross Merchandise Volume remained stable year-over-year, contrary to expectations of a decline.
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