On Tuesday, Jefferies adjusted its outlook on NetEase.com (NASDAQ:NTES) shares, a leading internet technology company, by slightly reducing the price target from $134.00 to $133.00. The firm has sustained its Buy rating.
The revision follows a noticeable decline in NetEase's share price, which dropped by 4.6% and 6.8% in its American Depositary Receipts (ADR) and Hong Kong listings, respectively. The dip in share value is attributed to market concerns about the gaming trend, particularly regarding the recent launch of the game "She Diao" on March 28.
The analyst from Jefferies noted that this is not an isolated incident, as there have been similar pullbacks in NetEase's share price in the past due to performances of specific titles that did not meet market expectations. Despite these setbacks, the analyst highlighted NetEase's strong research and development capabilities, which have consistently produced hit titles and contributed to a diversified portfolio.
In light of the recent market reaction, Jefferies has made adjustments to its annual grossing outlook for NetEase. The firm anticipates that upcoming game titles from NetEase will garner significant attention and interest from the gaming community.
The Buy rating maintained by Jefferies indicates a positive expectation for NetEase's stock performance, despite the current challenges faced by the company in the gaming sector. The minor adjustment to the price target suggests a nuanced approach in response to the recent market concerns, while still recognizing the company's potential for future growth and success in its diverse array of game offerings.
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