Vipshop downgraded to Neutral at UBS after ‘disappointing’ guidance

As previously reported, UBS analyst Wei Xiong downgraded Vipshop to Neutral from Buy with a price target of $12.50, down from $20. While the Q2 results met the firm’s estimates, guidance for a 5%-10% year-over-year decline in Q3 revenue was below UBS and consensus forecasts and the “disappointing” Q3 guidance suggests sector headwinds are heavier than expected, the analyst tells investors in a post-earnings note. While “encouraged” by management’s continued efforts to protect margins via product mix optimization and cost controls, UBS believe the company’s near-term growth could remain under pressure amid macro headwinds and competition, the analyst tells investors.