Morgan Stanley Boosts JOYY Price Target as Business Rebounds

Morgan Stanley Boosts JOYY Price Target Significantly

Morgan Stanley has raised its target price for JOYY (JOYY.US) from US$40 to US$62, signaling improvements in the fundamentals of JOYY's core services. This adjustment reflects a positive outlook, particularly regarding the recovery of the live streaming sector and encouraging shareholder benefits.

Understanding the Live Streaming Business Resurgence

The analysts at Morgan Stanley propose that JOYY's live-streaming segment may have reached its lowest point since the second quarter of the fiscal year. After reporting slight growth of 1% quarter-over-quarter, management's encouraging comments regarding future revenue are paving the way for optimism. The forecast suggests continued growth into the last half of this fiscal year and further expansion into 2026 and 2027.

Advertising Sector Seen as a Crucial Growth Engine

JOYY's advertising sector has shown impressive revenue growth, particularly in the first half of the current year, with prior year growth exceeding 175%. Morgan Stanley anticipates that this growth momentum will continue, expecting a significant year-over-year increase of 26% for the second half of this year and a projected 20% growth in the subsequent year. This indicates a robust trajectory for JOYY's advertising strategies, reinforcing the company’s profitability potential.

Commitment to Shareholder Returns

JOYY has also made headline news with its attractive return policies for shareholders. Recently, the company introduced a three-year dividend strategy, amounting to nearly US$600 million, alongside a share repurchase initiative worth up to US$300 million to be distributed over the same period. In the first half of this fiscal year, JOYY has already allocated US$135 million towards dividend payments and repurchases, making significant strides in maintaining shareholder value.

Key Factors Behind Morgan Stanley's Positive Update

The upward revision of JOYY's target price is not solely based on the recovering live streaming business but also includes factors such as JOYY's healthy cash reserves and sustained commitment to returning value to shareholders. These financial metrics provide a solid foundation, enabling JOYY to navigate market uncertainties while maximizing potential returns.

Looking Ahead: The Future of JOYY

As JOYY continues to adapt and refine its operations, the focus will likely remain on enhancing growth within both the live streaming and advertising sectors. Investors and analysts will be closely monitoring JOYY's quarterly reports and market strategies to assess the sustainability of this growth trajectory. Furthermore, the commitment to dividends and share buybacks exemplifies JOYY’s dedication to shareholder engagement and trust.

Frequently Asked Questions

What recent changes has Morgan Stanley made concerning JOYY?

Morgan Stanley has raised their target price for JOYY from US$40 to US$62, citing recovery signs and positive growth prospects.

Why is JOYY's live-streaming segment important to its growth?

The live-streaming segment is crucial as it has shown signs of recovery, paving the way for future growth and attracting more users and advertisers.

How has JOYY's advertising business been performing?

JOYY's advertising business has shown remarkable year-over-year growth, establishing it as a principal driver of revenue increase for the company.

What is JOYY's strategy for returning value to its shareholders?

JOYY has committed to a three-year dividend policy and a share buyback plan, totaling approximately US$900 million combined to enhance shareholder returns.

What is the projected growth for JOYY in the next few years?

The report forecasts a continuing upward trend in JOYY's growth, especially within its advertising and live-streaming sectors through 2026 and 2027.

About The Author

Dedicated Author and financial expert Logan Wright here, 29 years old. After earning an economics degree, I spent a number of years working in different financial industries. My great passion is enabling everyone, from any background or experience level, to understand and be literate in financial matters.

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