Dow chemical stock
In a note published Friday, analyst Steve Byrne downgraded the legacy chemical company to underperform from neutral, citing the possibility of a drop in chemical prices. LyondellBasell was also downgraded by the investment firm.
“While US [polyethelene] prices may rise further from here, we see the strength as increasingly vulnerable, with significant downside possible. As a result, LYB has been downgraded to Neutral and DOW has been downgraded to Underperform,”
“Commodity margins continued to rise in the second quarter, with many markets outperforming the underlying crude backdrop. As China slows, production recovers, and spending shifts from goods to services, we see this as a risk for a number of chemical chains,” the note said.
“On July 12, the Ministry of Culture and Tourism issued guidelines prohibiting streamers/talent agencies from inducing virtual gifting on live streaming platforms, which will take effect on January 1, 2022. As a result, revenue growth may turn negative in 2022. Profit could fall even further as a result of increased revenue sharing,” the note said of the industry as a whole.
The stock has struggled mightily this year, with shares falling more than 35% as U.S. investors become increasingly wary of investing in Chinese stocks.
Tencent’s monthly active users fell in the first quarter, and this trend could continue in the near future, according to Morgan Stanley.
“We expect YoY decline to narrow due to the base effect, but growth appears unlikely, given direct competition from NetEase and indirect competition from short-video platforms and Bilibili, among others,” according to the note.
Morgan Stanley reduced Tencent’s price target to $14 per share from $23 per share. The new target is roughly 13% higher than the stock’s closing price on Thursday.