Oppenheimer Outperform on Netease.com
Oppenheimer & Co. is out with a research report on Netease.com Inc. (NASDAQ: NTES) and it has an Outperform rating and a $60 price target on shares.
In a note to clients, Oppenheimer & Co. writes, "NTES reported 3Q11 results that were significantly above expectations. Gross margin remained relatively steady in the quarter while operating margin expanding q/q and y/y. In addition to the release of Tianxia III, the company's games pipeline remains robust with several expansion packs and games, including Legend of Fairy, scheduled for the remainder of the year. We are raising our estimates to reflect NTES' strong business momentum across business lines. We believe the stock is attractively valued, trading at ~8x 2012E PE (net of $13.50 net cash/share) given its strong growth and cash flow generation ($136M operating cash flow in 3Q11). We are raising our price target from $55 to $60 on higher estimates."
Shares of NTES closed at $45.70 yesterday.
