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Daiwa downgrades Vipshop after disappointing earnings

Published 08/18/2017, 06:07 AM
© Reuters.  Daiwa downgrades Vipshop after disappointing earnings
VIPS
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  • A Q2 miss by Vipshop (NYSE:VIPS) has prompted broker Daiwa to head to the sidelines, downgrading shares to Hold from Buy.
  • "We believe Vipshop now faces pressure at both the top and bottom line due to competition in a relatively saturated merchandise category (apparel, shoes and sportswear together account for 55+% of revenue), with decreasing efficacy of discounts for user acquisition," analyst John Choi writes.
  • Active users have declined in part due to slower expansion into new categories, he notes, and its multiple of 13 times 2018 earnings makes it a potential acquisition target.
  • He's cut the firm's price target to $11.10 from $17.50. Shares fell 8.1% in NYSE trading yesterday to $10.20 after Wednesday's miss; they're up 1% premarket.
  • Now read: Spark New Zealand grows revenues, profits in report


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