Deutsche Bank upgraded Netease.com (NASDAQ: NTES) from Hold to Buy and raised the price target from $51.00 to $58.00.
Deutsche Bank noted, “We attribute the 4Q earnings surprise (EPS beat our estimate by 18% and Bloomberg consensus by 14%) to relatively new games, which is recurring in nature, rather than World of Warcraft’s expansion pack launch, which is more one-off. We expect the 4Q momentum to continue over the next few quarters, which should also improve margins as gaming revenue shifts to in-house developed games. Further, NetEase’s valuation premium vs. peers is likely to widen as the company continues to prove its game development capabilities.”
Netease.com closed at $45.63 on Thursday.
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Tags: Deutsche Bank
Posted in: Analyst Color, Upgrades, Analyst Ratings