Big Moves | Concerns over Profit Margins, Tesla's Rating Downgraded! Could BIDU-SW's Performance Exceed Expectations?!

Truist: Downgrades Tesla's rating from "Buy" to "Hold"

The bank's move is mainly due to concerns about Tesla's profit margin, believing that Tesla may sacrifice short-term profits for long-term benefits.

Nomura: Maintains "Neutral" rating on BIDU-SW, target price of $141

If calculated at the latest closing price of $124.96, this price implies a 13% upside!

The bank believes that BIDU-SW's quarterly performance may exceed market expectations.

The core revenue of the group may increase by 7% annually, which is 3% higher than market expectations. By business line, its core advertising revenue may grow by 5% annually, higher than the 6% decline in the fourth quarter of 2022; cloud business service revenue may increase by 6%, slightly higher than the 4% growth in the previous quarter; non-GAAP core operating profit margin may increase slightly by 1 percentage point to 18%; non-GAAP net profit may increase by 15% annually to 4.695 billion.

Due to the growth of investment in computing power to support AI-related plans, the bank expects that BIDU-SW's core operating profit margin will face pressure in the next few quarters.

HSBC: Upgrades AT&T's rating from "Hold" to "Buy", target price of $21

If calculated at the latest closing price of $18.22, this price implies a 15% upside!

The bank said that last Thursday's plunge in the stock brought "opportunities" for entry. AT&T's stock price fell more than 10% last Thursday because investors were concerned that the company's free cash flow in the first quarter was only $1 billion, far below the expectations of many on Wall Street. This has raised concerns in the market about whether the company can maintain its dividend.

Morgan Stanley: Gives ZTE a "Buy" rating, target price of HK$30

If calculated at the latest closing price of HK$26, this price implies a 15% upside!

The bank believes that the operator business has resilience because major customers have announced their capital expenditure plans for this year, and the total budget has increased slightly year-on-year, which can support its revenue growth this year. The bank maintains a positive view of the stock, and with the increase in revenue contribution from data centers and the 5G technology license, it can help ZTE seize new growth opportunities in the future.

The report stated that ZTE's first-quarter net profit exceeded expectations, but revenue only increased by 4.3%, mainly due to the drag of the consumer electronics sector, as global smartphone shipments fell 12% year-on-year in the first quarter. The company emphasized that the innovative business department achieved more than 40% revenue growth in the quarter, showing a solid growth momentum.

JPMorgan: Gives Great Wall Motors a "Neutral" rating, target price of HK$9

If calculated at the latest closing price of HKD 9.35, this price means a 4% downside.

The bank stated that the company's first-quarter regular profit unexpectedly turned into a loss, confirming the bank's view that the market generally expects a downturn rather than an upturn this year, mainly due to declining sales, expanding discounts, and increasing distribution and operation expenses.

The bank also stated that on the positive side, it saw the main new energy vehicle models of Great Wall Motors at the Shanghai Auto Show, which may represent potential upside in sales or stock prices in the second half of this year. However, it is increasingly believed that more automotive stocks will perform similarly to last year due to the challenging competitive landscape, which may limit the upside of the stock.