On September 28, LENOVO GROUP fell 3.34% in regular trading, trading at 36.06 HKD/share, with turnover of 224 million HKD. The decline was triggered by Goldman Sachs issuing a new research note that, while maintaining a Buy rating on the stock, set a target price of just 31 HKD — significantly below the current share price and implying approximately 14% downside, raising market concerns over valuation sustainability.
The target-price inversion weighed on sentiment despite the company delivering a strong fiscal first quarter ending June, with revenue surging 43% year-over-year to 27 billion USD and adjusted net profit jumping 176% to 1.1 billion USD. The Goldman Sachs call contrasts sharply with other brokerages: CICC maintains an Outperform rating with a 51 HKD target, while Morgan Stanley holds an Overweight rating with a 46 HKD target. The stock had recently hit all-time highs after management publicly argued the company was undervalued relative to Dell, with CFO Zheng Xiaoming stating long-term net margins could reach 5%-8%.
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