UPDATE: Deutsche Bank Upgrades Netease.com to Buy on New Game Momentum

Deutsche Bank upgraded Netease.com

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.