UPDATE: JPMorgan Downgrades iQIYI (IQ) to Underweight
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JPMorgan analyst Binbin Ding downgraded iQIYI (NASDAQ: IQ) from Neutral to Underweight with a price target of $18.00.
The analyst comments "We believe IQ’s share price rebound YTD (42% vs. 14% of HSI) was mainly driven by 1) strong sentiment in overall stock market, and 2) investors taking profit on short positions post 3Q20 results; and to a lesser extent by 3) the expectation of paying subs recovery into 2021. The current market consensus has already baked in 10-15m net adds in paying subs for fullyear 2021. To move the share price higher, we believe it requires either 1) IQ to deliver at least 3-4m quarterly net adds consistently in the next few quarters, or 2) realization of IQ’s asset value through a potential M&A. We think the likelihood of both is low given the current market circumstances (a mature market with tightened content regulation, competitive pressure, anti-trust regulations, etc). Downgrade to Underweight."
Shares of iQIYI closed at $22.85 yesterday.
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