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UBS Upgrades Vipshop Holdings (VIPS) to Buy

July 15, 2020 6:49 AM EDT
Get Alerts VIPS Hot Sheet
Price: $16.46 +2.17%

Rating Summary:
    21 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 6 | Down: 3 | New: 1
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UBS analyst Jerry Liu upgraded Vipshop Holdings (NYSE: VIPS) from Neutral to Buy with a price target of $30.00 (from $18.00).

The analyst comments "We upgrade VIPS from Neutral to Buy with a new US$30 PT, as we believe the company will benefit from brands increasing need to clear excess apparel inventory this fall. Post Covid-19, VIPS is adding higher quality brands, and getting better terms from them. We expect revenue growth to accelerate from -11.8% YoY in 1Q to +16.4% in 4Q. Revenue growth this year includes a 5ppts headwind, as VIPS benefitted from a VAT cut last yet and spun off its delivery business in 4Q19 (Pinjun), so organic growth is over 20% by 4Q20E. We expect net margin to expand to 7.6% by 4Q20, up 1ppt YoY, due to better terms from brands and improving logistics efficiency (less warehousing). In our view, investors have not fully priced in the improving revenue growth and margins, with the stock underperforming all peers, except BABA, up ~50% YTD vs. 80- 130% for peers."

For an analyst ratings summary and ratings history on Vipshop Holdings click here. For more ratings news on Vipshop Holdings click here.

Shares of Vipshop Holdings closed at $21.50 yesterday.



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