According to Yao, the antitrust ruling will prevent Tencent from establishing exclusive relationships with music labels, making life easier for competitors.
According to the JPMorgan note, “the verdict requires TME to remove all exclusive copyright agreements with copyright owners (music labels) within 30 days of the announcement.” “TME will be unable to reach exclusive copyright agreements with copyright owners in the future. Exclusive agreements with indie musicians (without contracts with music labels) and new song debut launches are exceptions.”
New tipping rules for live streaming go into effect next year, which could be a significant blow to Tencent Music’s key business.
“We estimate that live-streaming will account for 51% of total revenue in 2021/25. As a result, the financial impact of such a change in the regulatory environment is, in our opinion, too large to ignore,” the note stated.
JPMorgan cut its price target from $33 to $12 per share. The new target is 14.8% higher than the stock’s closing price on Wednesday.
According to Morgan Stanley, it may halt a period of sharp expansion in part of the semiconductor sector and this would be terrible news for Micron stockholders.
In a note issued Wednesday evening, the firm’s analysts stated that they were turning bearish on the dynamic random-access memory chips segment of the semiconductor industry. The semiconductor industry as a whole has seen strong demand this year as companies try to keep up with brisk consumer demand for electronics and vehicles, but the firm believes the DRAM business is entering a cyclical downturn.
“DRAM cyclical conditions have begun to roll over. “Initially, we believed that as long as demand remained strong into 4Q, prices could continue to rise because bit supply has outpaced production, causing inventory to tighten,” the note stated. “However, while demand has remained strong on a relative basis, it has deteriorated in recent weeks, leading to a decrease in pricing expectations.”
According to Morgan Stanley, the sector-wide slowdown will keep Micron’s share price in check, despite the company’s positives. Micron was downgraded from overweight to equal weight by the company.
“While we have been impressed by the company’s structural improvements and see limited downside, we see the stock as effectively rangebound in an environment where DRAM prices begin to decline,” according to the note.
Morgan Stanley reduced its price target for Micron from $105 to $75 per share. On Wednesday, the stock closed at $75.03 per share, bringing its year-to-date performance to a halt.
Virgin Galactic stock
The stock price of Virgin Galactic will struggle to go up until Credit Suisse speeds up its flying schedule.
Analyst Robert Spingarn reinstated coverage of the space exploration stock and downgraded it from outperform to neutral. In a note to clients, Spingarn stated that Virgin Galactic’s schedule, which includes a planned flight in September before a months-long maintenance period, offers few opportunities for upside.
“Our previous Outperform rating was based on catalysts like the Branson flight and the beginning of commercial operations However, with the former completed and the latter delayed to Q4′22 [Credit Suisse estimate] due to an extended maintenance and enhancement period, the catalyst path in the next 12 months is less robust,” according to the note.
On Wednesday, Morgan Stanley downgraded Virgin Galactic, citing similar concerns. The call appeared to spark a sell-off, with shares falling more than 12%.
Credit Suisse also predicted that Virgin Galactic would put its third ship on hold in order to focus on the delta class of vehicle, which would handle weekly flights. The delta class, however, may not be ready until 2024, according to the firm.
“With the new, much flatter and elongated ship delivery schedule, the flight manifest for 2021-2022 is now rather light (6 total revenue flights by our math),” the note said. “While 2023 may see some 25-30 flights, this is still well behind prior expectations.”
Credit Suisse reduced its price target for Virgin Galactic by $3 to $30 per share, which is only 10% higher than the stock’s closing price on Wednesday.