JPMorgan analysts upgraded Bilibili (NASDAQ:BILI) from Underweight to Neutral, citing a positive near-term share price outlook.
The investment behemoth also raised price targets on the video-sharing website to $11 and HK$85.
First of all, JPMorgan believes Bilibili's management's target for double-digit revenue growth in 2024, aligning with a consensus of 14% year-over-year growth, suggests limited forecast cuts.
“However, we also believe that the actual achievement of double-digit revenue growth in 2024 will require good performance of new game pipelines and resilient growth in live streaming,” analysts said in a note on Sunday.
Furthermore, Bilibili's upcoming game launches, including major titles like Three Kingdom and Heaven Burns Red starting from the second quarter of 2024, are expected to reaccelerate game revenue.
Also, after reporting two consecutive quarters of positive operating cash flow, Bilibili aims for non-GAAP operating profit breakeven by the third quarter of 2024, JPMorgan noted.
“With these catalysts, we think share price downside is limited in the next 3- 6M. Furthermore, stronger-than-expected performance of new games could drive share price outperformance,” analysts noted.
Simultaneously, Citi analysts lowered their rating on BILI from Buy to Neutral/High Risk, amid “unexciting outlook as growth moderates.”
The broker lowered revenue estimates for 2024 and 2025 fiscal years by 2% and 4%, respectively “ to reflect softer outlook over gaming and other business,” while also lowering the target price to$12.5 from US$18.