The Hong Kong-listed shares of Lenovo Group (HK:0992) plunged 10% on Friday, impacted by dismal sales reported by chipmaker Intel (NASDAQ:INTC), which raised concerns about continued weakness in PC demand.
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Lenovo in News
The work-from-home and online learning trends during the COVID-19 lockdowns led to a pandemic-induced surge in the demand for PCs. However, the spike in PC demand faded following the reopening of the economy. Moreover, macro pressures weighed on consumers’ discretionary spending. Intel’s latest results reflected the persistent weakness in the PC market, adversely impacting Lenovo’s shares.
Separately, a Bloomberg report stated that Lenovo’s rivals Dell Technologies (NYSE:DELL) and Micron (NASDAQ:MU) funded China Tech Threat (CTT), a group whose study was part of a previously published opinion piece in Newsweek by retired U.S. army general James “Spider” Marks.
Marks’ opinion essay, published last year, highlighted the significant number of Lenovo computers in American government offices and urged for a ban on the company. Marks mentioned a study by CTT, a research and advocacy group, which revealed that a review of contract information and public databases from 28 states indicated that U.S. states bought at least $230 million worth of Lexmark or Lenovo equipment since 2015. Given that CTT is reportedly funded by Lenovo’s rivals, the credibility of the organization’s data becomes questionable.
What is the Price Target for Lenovo Stock?
Lenovo shares have risen nearly 47% in the past year but are down more than 15% over the past month due to concerns about subdued demand for PCs amid macro pressures.
Analysts have a Moderate Buy consensus rating on Lenovo stock based on five Buys, one Hold, and one Sell rating. The Lenovo Group average share price target of HK$10.87 implies nearly 6% upside potential (as of January 25).
