Earlier this month, NetEase and Activision Blizzard scrapped a smartphone version of World of Warcraft after disagreeing on the terms of the project. Activision denied any disagreement and NetEase had no comment. Could Microsoft’s pending acquisition of Activision have figured into the decision?
All 25 brokerage houses covering the stock have a Buy or Strong Buy rating. At a share price of around $92.40, the stock’s implied gain based on a median price target of $125.27 is 35.6%. At the high price target of $147.55, the upside potential is almost 60%.
Analysts are forecasting second-quarter revenue of $3.43 billion, down 7.8% sequentially and up 7.9% year over year. The estimate for adjusted EPS of $1.05 is down by a penny sequentially and up by about 8.2% year over year. For the full 2022 year, analysts are looking for EPS of $4.56, down 2.1%, on a year-over-year sales increase of 5.9% to $14.6 billion.
NetEase ADRs trade at 20.3 times expected 2022 EPS, 17.4 times estimated 2023 earnings of $5.30 and 15.8 times estimated 2024 earnings of $5.83 per ADR. NetEase’s 52-week range is $68.62 to $118.19, and the company pays an annual dividend of $1.19 (yield of 1.29%). Total shareholder return for the past year was about 4.4%.
Luxury goods maker and retailer Tapestry Inc. (NYSE: TPR) posted its 52-week high way back in mid-November. Since then the shares have dropped nearly 21% despite the company’s own predictions of 15% to 20% revenue growth this year.
The companies leading brands (Kate Spade, Coach, Stuart Weitzman) have significant pricing power and have reduced the impact of inflation on revenue and margins. Tapestry also expects sales in China to rise, but that might be a bit uncertain now, given the general, non-coronavirus-related economic slowdown in the country.
Of 23 analysts covering the stock, 17 have a Buy or Strong Buy rating while the rest rate the shares at Hold. At a share price of around $36.20, the stock’s implied gain based on a median price target of $45.00 is 24.3%. At the high price target of $60.00, the upside potential is around 65.7%.
Analysts are forecasting fourth-quarter revenue of $1.64 billion, or 13.8% higher sequentially and up 1.2% year over year. Adjusted EPS of $0.77 would be up 51.5% sequentially and by about 4.0% year over year. For the full 2022 year that ended in June, analysts are looking for EPS of $3.46, up 16.5%, on sales to $6.7 billion, also up 16.5%.
Tapestry stock trades at 10.5 times expected 2022 EPS, 9.2 times estimated 2023 earnings of $3.91 and 8.4 times estimated 2024 earnings of $4.32 per share. The company’s 52-week range is $26.39 to $47.05, and the company pays an annual dividend of $1.00 (yield of 2.8%). Total shareholder return for the past year was negative 14.5%.
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