2020-07-16 06:29:59 | Barclays downgrades GSX Techedu on valuation, not fraud concernsBarclays analyst Gregory Zhao downgraded GSX Techedu to Equal Weight from Overweight with a price target of $76, up from $48. The stock closed Wednesday down $2.99 to $76.63. The analyst maintains a positive view on China online education's outlook and GSX's market share expansion. However, he views the shares as fairly valued at the current price. Zhao says that while he regards the alternative data presented in short-seller reports as "good supplements to fundamental research," he thinks "sampling-based analysis is still not adequate or convincing enough to reach a conclusion on fraud." Based on recent discussions with investors, the analyst notes they are "less concerned about the fraud allegations, and attention is focused on fundamentals again." | |
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