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On Wednesday, Barclays (LON:BARC) analyst Jiong Shao increased Sea Ltd’s (NYSE:SE) price target to $200 from the previous $182 while maintaining an Overweight rating on the stock. The company’s stock, currently trading near its 52-week high of $155.52, has delivered an impressive 132% return over the past year. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, though it maintains a "GREAT" overall financial health score of 3.12 out of 5. The adjustment follows Sea Ltd’s first-quarter performance, where its digital commerce arm, Shopee, reported a Gross Merchandise Value (GMV) growth of 21.5% year-over-year. Notably, Shopee’s EBITDA margin, representing 0.92% of GMV, was highlighted as a significant positive surprise, with EBITDA over 100% above Barclays’ prior estimates. The company’s overall EBITDA reached $1.42 billion in the last twelve months, while maintaining a healthy current ratio of 1.51 and strong cash flows that adequately cover interest payments.
Shao’s commentary emphasized the unexpectedly rapid progress in Shopee’s margin expansion and profit growth in the first quarter. The analysis suggests that Shopee is on track to achieve significant profit growth by 2025, a year that has been marked by Barclays as pivotal for the company’s profitability. The driving force behind this profitability is believed to be the sustained EBITDA margins moving forward.
In addition to Shopee’s performance, Sea Ltd’s financial technology segment, recently rebranded from SeaMoney to Monee, also received bullish remarks. Monee is set to differentiate itself from conventional fintech, aspiring to become a mainstream banking platform. Sea Ltd holds multiple digital bank licenses in the region and is already accepting deposits. The platform has begun to monetize its services beyond credit products, such as Buy Now Pay Later (BNPL) and cash loans, with the potential to become a leading bank in the ASEAN region.
Furthermore, Sea Ltd’s gaming division, Garena, exceeded expectations by achieving a year-over-year bookings growth of more than 50%, surpassing the high teens growth estimated by Barclays. Garena also reported the highest margins seen in recent quarters.
In conclusion, Shao reiterated a positive outlook for Sea Ltd, noting that all three of its main businesses—Shopee, Monee, and Garena—are expected to generate over $1 billion in profits each by 2025. The firm recommends Sea Ltd as a core holding for investors, signaling confidence in the company’s growth trajectory across its diversified business segments. With revenue growth of 30.3% and an impressive Piotroski score of 7, the company demonstrates strong fundamental performance. For deeper insights into Sea Ltd’s valuation and growth prospects, InvestingPro subscribers can access 18 additional exclusive tips and a comprehensive Pro Research Report, part of the platform’s coverage of over 1,400 US equities.
In other recent news, Sea Ltd reported impressive first-quarter results for 2025, showcasing a notable increase in EBITDA margin to 0.9% of GMV and a 21% year-over-year growth in GMV. This growth has been accompanied by a 6% reduction in logistics costs per order in Asia, despite improvements in service quality. Additionally, advertising revenues surged by over 50% year-over-year, with more sellers investing in advertisements on the Shopee platform. Analysts from JPMorgan have upgraded Sea Ltd’s stock rating to Overweight, raising the price target to $190, citing the company’s strong ecommerce performance and potential for margin expansion.
On the other hand, BofA Securities downgraded Sea Ltd from Buy to Neutral, setting a price target of $160, reflecting a more balanced risk-reward scenario after significant stock gains. They noted robust growth projections for Sea Ltd’s business segments but expressed caution about future performance amid a slowing macroeconomic environment. Meanwhile, Morgan Stanley (NYSE:MS) maintained an Overweight rating with a $167 price target, emphasizing strong growth in Sea Ltd’s Digital Entertainment and E-commerce segments. They anticipate a 21% year-over-year growth in EC GMV and a 50% increase in revenue for Digital Financial Services.
Lastly, JPMorgan previously downgraded Sea Ltd to Neutral with a price target of $135, adjusting their forecasts due to lower growth expectations in GMV and take rate. Despite differing analyst opinions, Sea Ltd’s recent developments reflect a dynamic landscape with significant growth in various segments.
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