Shares of Tencent are up more than 10 percent year-to-date. Since the low in October, shares have rallied about 40 percent. The company’s market capitalization is up over $39.5 billion this year. Tencent shares, however, are still around 25 percent off their January 2018 record high.
Nomura and Jefferies both have “buy” ratings on Tencent’s stock. The average price target for Tencent shares is just over 394 Hong Kong dollars, according to Reuters. If that were realized, it would represent around a 12.5 percent upside from Monday’s opening price.
Analysts remain bullish on Tencent in the long-term because of other parts of the business such as payments platform WeChat Pay and advertising throughout its various properties.
“A long-term theme is to further unlock the value of its user base beyond game distribution, by diversifying monetization mechanisms (e.g. ads), expanding service/product offerings (e.g. fintech products, autonomous driving) and leveraging user access for marketing Tencent-branded enterprise services (e.g. cloud),” Charlie Chai, analyst at 86 Research, told CNBC.