Morgan Stanley: Raises Tencent Holdings Limited target price to HKD 650, expects stable growth in revenue and profit for the next quarter
Morgan Stanley released a research report stating that it reaffirms Tencent Holdings as its preferred stock, reflecting its solid revenue and profit growth, as well as limited exposure to ongoing competitive risks, while reiterating an "Overweight" rating. Using the sum-of-the-parts valuation method, it raised its target price by 3%, from HKD 630 to HKD 650, corresponding to an expected price-to-earnings ratio of 18 times in 2026, which has some upside potential compared to the current valuation of 15 times. Morgan Stanley indicated that Tencent benefits from solid growth in its gaming and advertising businesses, with a slight recovery in Financial and Business Services (FBS). It expects Tencent's revenue and profit growth to be robust in the second quarter of this year, with revenue and non-International Financial Reporting Standards (non-IFRS) operating profit expected to grow by 11% and 14%, respectively. Due to increased investments in artificial intelligence, the operating profit leverage effect will narrow, but profit margins are still expected to continue expanding
According to Zhitong Finance APP, Morgan Stanley released a research report stating that it reaffirms Tencent Holdings Limited (00700) as its preferred stock, reflecting its solid revenue and profit growth, as well as limited exposure to ongoing competitive risks, while reiterating an "Overweight" rating. Using the sum-of-the-parts valuation method, it raised its target price by 3%, from HKD 630 to HKD 650, corresponding to an expected price-to-earnings ratio of 18 times for 2026, which has some upside compared to the current valuation of 15 times.
Morgan Stanley indicated that Tencent benefits from solid growth in its gaming and advertising businesses, with a slight recovery in Financial and Business Services (FBS). It expects Tencent's revenue and profit growth to be robust in the second quarter of this year, with revenue and non-International Financial Reporting Standards (non-IFRS) operating profit expected to grow by 11% and 14%, respectively. Due to increased investment in artificial intelligence, the operating profit leverage effect will narrow, but profit margins are still expected to continue expanding
