Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Thursday, Goldman Sachs updated its financial outlook on Tencent Holdings (HK:0700) (700:HK) (OTC:TCEHY), increasing the price target to HK$595 from the previous HK$590, while sustaining a Buy rating on the stock. The revision follows Tencent’s reported earnings for the first quarter of 2025, which exceeded expectations with a 13% year-over-year increase in top-line revenue and a 25% rise in earnings per share (EPS).
Tencent’s performance was bolstered by robust growth in its primary revenue channels, with both gaming and marketing services expanding by over 20% year-over-year. Additionally, the company achieved its highest gross margin since the second quarter of 2016. In light of these results, Goldman Sachs analysts have revised Tencent’s full-year 2025 and 2026 revenue and EPS forecasts upwards by 1%.
The revised estimates now anticipate an 11% year-over-year revenue growth for both the second quarter of 2025 and the full year, an increase from the previously projected 10%. EPS growth projections have also been adjusted to 18% for the second quarter and 15% for the full year, slightly modified from the earlier forecasts of 20% and 16%, respectively.
Goldman Sachs’ analyst highlighted Tencent’s diverse business model and strategic investments in artificial intelligence (AI) as key drivers of the company’s long-term growth potential, particularly in areas such as marketing services, eCommerce, gaming, and cloud services. The analyst’s commentary underscored the strength of Tencent’s WeChat ecosystem and its global gaming assets, which are expected to continue driving the company’s earnings growth through various economic cycles.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.