On Monday, Bernstein SocGen Group maintained its Outperform rating and $105.00 price target for NASDAQ:NTES, the stock of NetEase (NASDAQ:NTES).com.
The firm highlighted NetEase's position at the intersection of fundamentally sound operations, reasonable valuation backed by capital return yield, and stable market sentiment and positioning. This endorsement comes despite a challenging year for NetEase, which faced product setbacks and potential regulatory issues.
The analyst pointed to NetEase's ability to overcome obstacles in 2024, noting the revenue stabilization of its game Fantasy Westward Journey and the successful rebound of Blizzard's games, which helped the company recover from PC market difficulties. The firm also cited upcoming game releases as a positive factor that could enhance visibility for investors regarding the company's product pipeline.
NetEase's outlook is bolstered by the broader struggles in the Western video gaming industry, according to Bernstein SocGen Group. The firm suggests that these challenges present opportunities for NetEase to grow internationally. The expansion could occur through the establishment of new studios or by publishing games developed by NetEase's in-house studios in China.
The analyst's statement underscores the potential for NetEase to leverage its current position and capitalize on the shifting dynamics of the global video gaming market. With several new game launches anticipated, the firm's outlook for NetEase is one of cautious optimism, provided the company can navigate the industry's challenges and leverage its strengths effectively.
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