UPDATE: Credit Suisse Restarts NetEase.com (NTES) at Neutral; Positive on Pipeline, but Sees Earnings Growth Normalizing
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
(Updated - August 19, 2016 7:50 AM EDT)
Credit Suisse downgraded NetEase.com (NASDAQ: NTES) from Outperform to Neutral with a price target of $230.00 (from $200.00).
The firm commented:
- 2Q beat con. revenue and profit by 6% and 24%, respectively due to: (1) game revenue +7% QoQ-the successful launch of PC game Overwatch helped offset slower mobile revenue (+3% QoQ) and (2) surprise strength from e-commerce and related business on scale built-up and mix shift (more platform business).
- Looking ahead, new game launches/ramping up and expansion packs should help sustain online game revenue growth, albeit at a milder pace, and scale improvement of Kaola.com (eCommerce platform launched in 2015) should help lift margin. Medium term, management is exploring AR/VR technology potential.
- While we continue to like the solid development platform and robust pipeline of NTES, as the PC to mobile game transformation (driver for past year) is largely done, its earnings growth is likely to normalise. The share has rallied (past four months: +61%) to 15x 17 P/E (1.5 SD above hist. avg.), and it may consolidate, in our view.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Pivotal Research Downgrades Kroger (KR) to Hold
- Jefferies Cuts Price Target on Dollar General (DG) Following 3Q
- Jefferies Raises Price Target on Zumiez, Inc. (ZUMZ) to $23 Following 3Q
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesCredit Suisse, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!