BofA Downgrades Autohome On Continued Auto Headwinds

Autohome Inc ATHM is facing structural headwinds in the auto industry and stiffening competition, according to BofA Securities.

The Autohome Analyst: Miranda Zhuang downgraded the rating for Autohome from Buy to Underperform, while reducing the price target from $117 to $46.

The Autohome Thesis: The company’s core business is likely to be hurt by the auto market’s cyclicality since the second quarter of 2021 and the headwind “could be prolonged,” Zhuang said in the downgrade note.

“Our auto team revised down 2021 PV sales and expects the ICEV subsector to be declining throughout 2022-25 due to the structural rise of NEV, which we believe is negative to Autohome in the near term as NEV’s ad budget is, in general, less than ICEV and doesn’t use auto dealers,” she wrote.

“The competition for auto spend is intensifying, negatively impacting Autohome. While Autohome is still the largest platform in terms of user base, competitors are growing users faster,” the analyst added.

ATHM Price Action: Shares of Autohome are down 8.74% to $42.73 at the time of publication Tuesday.