Analysts at BofA Merrill Lynch have raised the price target on E-Commerce China Dangdang (DANG) to $23 from $14 citing Marketplace and efficiency initiatives. It reiterated its Buy rating on the stock.
“We raise our PO to $23 (from $14) on the back of a better understanding of co.’s new initiatives to drive marketplace expansion and to enhance fulfillment efficiency to support long term outlook, post our 4Q13 results note published on Feb 27.” BofA Merrill Lynch said in a note to clients.
“Contrary to consensus estimates that Dangdang will turn loss making again in 1H14, we expect it to remain profitable with 0.3%/1.0% net margin in 1Q/2Q14E. Hence, we raise our 2014/15E sales by 8%/29% and EPS by 1/40%. The valuation implies 1.1x our 2015E P/sales ratio and 32x P/E, which is at a discount to its peers’ 2.0x 2015E P/sales and 45x 2015 P/E.” it added.
Shares of E-Commerce China Dangdang (DANG) closed at $16.65 on Monday.