Tencent Music Entertainment Group (NYSE:TME) shares rose on Wednesday after analysts weighed in positively on the company’s Q1 earnings report.
TME posted EPS of 0.73 yuan (CNY 1 = $0.1429) on revenue of 7 billion yuan, topping the consensus for earnings of 0.70 yuan on revenue of 6.88B yuan.
On a more negative note, the number of mobile monthly active users for social entertainment fell by 16% to 136 million.
"Our total revenues experienced healthy growth in the first quarter, while our focus on efficiency optimization also drove robust net profit growth," said Mr. Cussion Pang, Executive Chairman of TME.
Citi analysts upgraded shares to Buy from Neutral with the price target of $9.70 per share.
“[We] believe low/affordable music entertainment subscription ticket size could prove resilient/defensive amid cautious consumption environment,” they said in a note.
Macquarie analysts also upgraded shares as they went to the Neutral rating, highlighting “effective diversification, better margins.” The new price target is $7.40.
“While revenue growth remained in the single digit trajectory, we believe much of the downside risks have now been baked into market expectations and current valuation. We upgrade a notch to a Neutral rating,” they wrote.
Analysts at China Renaissance also raised their recommendation on the TME stock.