Morgan Stanley upgrades NetEase on PC game pipeline

Investing.com -- Morgan Stanley upgraded NetEase Inc (NASDAQ: NTES) to "overweight" from "equal-weight," raising its price target to $108 from $90, driven by optimism over its PC gaming business.

Brokerage expects NetEase's strong PC game pipeline to fuel an earnings turnaround, with forecasted revenue gains from games like Marvel Rivals and FragPunk. Additionally, the reintroduction of Blizzard games in China has maintained record-high gross revenue.

Morgan Stanley (NYSE: MS) raised its 2025-26 non-GAAP EPS estimates for NetEase by 8% and 12%, citing improved sales and cost control. Brokerage also highlighted stabilization in NetEase’s mobile gaming segment with the launch of Where Winds Meet.

The upgrade comes as Morgan Stanley adjusted its valuation framework to December 2025, reflecting a USD/CNY exchange rate assumption of 7.6.

Meanwhile Morgan Stanley also raised Trip.com’s price target to $81, reflecting a diversified revenue base and lower market risk.

MS noted solid fundamentals in the online travel platform space, with China prioritizing consumption growth, which could drive mid-teens revenue expansion in 2025.

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