2 Reasons NetEase Is Built for Growth
Citing near-term headwinds, investment banking firm Jefferies downgraded NetEase (NASDAQ: NTES) from buy to hold earlier this month, slashing the stock's price target from $330 to $290. Analysts Ani Tu and Karen Chan believe that a lack of new game releases in the near future, and the tepid performance of NetEase's existing lineup, will hurt the Chinese video game specialist's top and bottom lines.
The analysts carried out channel checks showing a drop in the average monthly gross of one NetEase title -- Onmyoji -- while other titles remained largely stable. Jefferies believes that this lack of growth could reduce the company's mobile game revenue by 20% sequentially during the third quarter (which ended in September).
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Source: Fool.com