UPDATE: JPMorgan Double Downgrades NetEase.com (NTES) to Underweight

JPMorgan analyst Alex Yao downgraded NetEase.com (NASDAQ: NTES) from Overweight to Underweight with a price target of $60.00 (from $125.00).

The analyst comments "As risk management becomes the most important consideration among global investors in relation to their China investment strategy, the sector-wide sell-off in China internet names might continue without valuation support in the near term, in our view. NetEase’s share price is relatively resilient against overall China internet stocks (NetEase share price -22%/+6% YTD in 2021, vs KWEB -34%/-52%), due to strong game performance since 2H21. We maintain our positive view on its long-term growth outlook in the China and international game markets. However, we believe its six-month outlook has become more challenging, due to negative fund flows, and fundamental headwinds such as: 1) grossing normalization from peak level of its 2H21 key titles Harry Potter (HPM)/Naraka: Bladepoint, which could offset the potential incremental revenue contribution from new games in 1H22; 2) modest grossing performance of legacy game titles due to the macro environment; and 3) uncertainty in game licence approval timing. Downgrade to UW."

For an analyst ratings summary and ratings history on NetEase.com click here. For more ratings news on NetEase.com click here.

Shares of NetEase.com closed at $79.09 yesterday.

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