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Morgan Stanley Lowers Price Targets On Two Chinese Media Stocks

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Earlier Tuesday, Morgan Stanley analyst George Meng cut the firm's price target on Sohu.com (NASDAQ: SOHU) and Changyou.com (NASDAQ: CYOU) from $53 and $23.80 to $51.50 and $22.40, respectively, while maintaining an Underweight rating for both stocks.

Sohu.com
Meng's investment thesis for Sohu included:

  • Concerns regarding near-term pressure to profitability due to heavy investments into online gaming, including mobile games and platform strategy.
  • Belief that cooperation with Tencent could drive faster growth for its Sogou business and increase its position in China's search market.
  • Recent regulation and competition may negatively affect online video ad revenue.

Changyou.com

For Changyou, Meng noted:

  • Legacy games continue to trend down.
  • Spending and investment related to the platform is expected to continue until at least 2015.
  • EPS estimates cut from $1.91 to $1.71 in 2014 and from $3.59 to $3.50 in 2016.

Latest Ratings for CYOU

DateFirmActionFromTo
Aug 2019Initiates Coverage OnUnderperform
Jul 2018UpgradesUnderperformNeutral
Apr 2018DowngradesNeutralUnderperform

View More Analyst Ratings for CYOU
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Posted-In: George Meng Morgan StanleyAnalyst Color Price Target Reiteration Analyst Ratings

 

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