On Friday, Jefferies raised the price target on Tencent Holdings (HK:0700) (700:HK) (OTC: OTC:TCEHY) shares to HK$484 from HK$480, while reiterating a Buy rating on the stock.
The firm highlighted the company's high-quality growth strategies as a key driver for the positive outlook. Tencent's recent performance, particularly with the mobile game Dungeon & Fighter (DnF Mobile), has outperformed expectations, contributing to the firm's decision.
The analysis by Jefferies also pointed to Tencent's ability to refresh and rejuvenate its existing game portfolio as a significant factor. Moreover, the company's online advertising segment is anticipated to gain from technological enhancements in advertising and the robust performance of video accounts. These factors have led to a slight increase in the price target for Tencent's shares.
Jefferies noted that similar to the trends observed in the first quarter, the Financial and Business Services (FBS) segment's results would largely hinge on the recovery pace of broader macroeconomic conditions. The firm expects these trends to continue influencing Tencent's performance in the upcoming quarter.
The updated price target reflects the firm's confidence in Tencent's strategic initiatives and its potential for sustained growth. Jefferies maintains its Buy rating, signaling a positive stance on the company's shares in the market.
The adjustment in Tencent's price target by Jefferies follows the company's efforts to innovate and adapt in a rapidly evolving digital landscape, with a focus on maintaining the momentum of its gaming division and enhancing its advertising technology.
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