Citi lowers YY Inc stock target to $46 but maintains buy rating following Bigo Live’s recovery

Citi lowers YY Inc stock target to  but maintains buy rating following Bigo Live’s recovery

© Reuters.

On Tuesday, Citi adjusted its financial outlook for YY Inc (NASDAQ: YY), one of the world’s leading social media platforms. The firm’s price target for the company’s stock was reduced to $46.00 from $47.00. Despite the adjustment, Citi continues to recommend a Buy rating on the stock.

YY Inc recently reported its fourth quarter 2023 results, which slightly beat those of Citi and the general market consensus. The company’s revenue guidance for the first quarter of 2024 is expected to be between $543 million and $560 million, with the midpoint of this range being 5% above market expectations.

This positive outlook is attributed to the sustained recovery of Bigo Live, particularly in developed regions, and the solid growth of Likee. These platforms are expected to maintain their momentum until 2024.

The company plans to increase its marketing investments to further drive revenue growth, while also aiming to maintain stable profits. In light of these strategies, Citi has slightly revised downward its earnings estimates for YY Inc for the years 2024 and 2025 by 17% and 14% respectively. This revision reflects expected higher reinvestment costs.

A critical factor for YY Inc’s stock performance in the near future is the progress of the termination of the YY Live agreement. Negotiations could extend over a period since Baidu (NASDAQ:) has controlled YY Live for some time.

Nonetheless, Citi maintains a positive outlook on YY Inc, bolstered by the company’s strong net cash position and an unused share repurchase program quota of $505 million.

This article was generated with the support of AI and reviewed by an editor. For more information, consult our General Terms and Conditions.

Source Reference

Latest stories