Tencent Music's Average Revenue Per User Focus Signals Potential Profit Growth, Says Analyst
Portfolio Pulse from Anusuya Lahiri
BofA Securities analyst Lei Zhang reiterated a Buy rating on Tencent Music Entertainment Group (NYSE:TME) with a price target of $15, down from $18. Despite missing revenue estimates for Q2 2024, the company met EPS expectations. Zhang highlighted the company's focus on ARPU growth and premium services, which could drive profitability. The price target cut reflects a lowered average fiscal 2025 P/E of 20x amid a weak market.
August 14, 2024 | 4:56 pm
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BofA Securities analyst Lei Zhang reiterated a Buy rating on Tencent Music Entertainment Group (NYSE:TME) with a price target of $15, down from $18. Despite missing revenue estimates for Q2 2024, the company met EPS expectations. Zhang highlighted the company's focus on ARPU growth and premium services, which could drive profitability. The price target cut reflects a lowered average fiscal 2025 P/E of 20x amid a weak market.
The analyst's reiteration of a Buy rating and focus on ARPU growth suggests confidence in Tencent Music's long-term profitability. The price target cut is due to market conditions rather than company performance, indicating potential for future growth.
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