Morgan Stanley analyst Divya Gangahar maintained a Buy rating on Sea (SE – Research Report) today and set a price target of $91.00.
Divya Gangahar has given his Buy rating due to a combination of factors indicating strong performance and growth potential for Sea Ltd. The sustained momentum of Sea’s gaming arm, Free Fire, is a key driver, with an 11% quarter-over-quarter increase in downloads and a notable 18% year-over-year increase in revenues for the second quarter. Additionally, Shopee, Sea’s e-commerce platform, has shown stable growth with its monthly active users (MAUs) trends in the second quarter mirroring the first quarter’s positive numbers.
The analyst’s optimism is further bolstered by the impressive growth of Sea’s e-commerce presence in Brazil, where MAUs surged by 26% year-over-year, and in key ASEAN markets with a significant year-over-year increase in downloads and MAUs. Moreover, the new traction gained by Temu, with downloads in the Philippines reaching 3.2 million in June compared to an average of less than 500,000, indicates a promising expansion within the region. With expectations of increased e-commerce profitability throughout 2024, Gangahar maintains a positive outlook for Sea Ltd’s financial future.
In another report released on June 26, UBS also reiterated a Buy rating on the stock with a $87.00 price target.
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Sea (SE) Company Description:
Founded in 2009, Singapore-based Sea Limited is an internet and mobile platform company, which provides provides online personal computer and mobile digital content, e-commerce, gaming services and payment platforms. The company operates through three core businesses across digital entertainment, e-commerce, as well as digital payments and financial services, known as Garena, Shopee, and SeaMoney, respectively.
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