Citi Trims PDD Price Target to $142 Ahead of Earnings, Citing Domestic Slowdown and Temu Costs

PDD Holdings (NASDAQ: PDD), the Chinese e-commerce giant behind Pinduoduo and the fast-growing cross-border platform Temu, faces a tempered outlook from Wall Street. Citigroup analyst Alicia Yap lowered the firm's price target on PDD from $170 to $142 in a recent note, while reiterating a Neutral rating on the stock.

The revised target, set ahead of the company's Q4 2025 earnings report, still suggests a potential upside of over 35% from recent levels. However, Yap cited a dual challenge for the commerce group: a cooling domestic retail environment in China is expected to offset a recovery in U.S. traffic for Temu. Furthermore, the analyst projected that heightened marketing and operational expenses, particularly for Temu's aggressive global expansion, could pressure profitability into 2026.

The analyst community remains broadly favorable on PDD. According to consensus data, 68% of the 44 analysts covering the stock maintain a Buy rating, with a median price target of $151.29—implying nearly 44% upside potential.

In a prior update, Citi had viewed a recent administrative fine from Shanghai tax authorities as a "smaller-than-feared" event, a sentiment Yap reaffirmed. She noted that the resolution helped remove a regulatory overhang that had weighed on investor sentiment.

Market Voices:

"This is a prudent recalibration," says Michael Chen, a portfolio manager at Horizon Capital. "PDD's growth story is intact, but the market is rightly pricing in the cost of global ambition. Temu's burn rate is the new key variable."

"The domestic slowdown is a serious headwind," notes Sarah Lin, an independent retail analyst. "Pinduoduo's core strength is value-for-money in a tightening economy, but its growth ceiling is becoming visible."

"Neutral? It should be a sell," argues David R. Miller, a vocal commentator on financial forums. "This target cut is the canary in the coal mine. Between regulatory risks in China and unsustainable cash burn at Temu, this stock is a value trap dressed as a growth play."

As PDD navigates the balance between its established domestic engine and its costly international foray, investor focus will sharpen on its upcoming earnings call for clues on sustainable margin management.