JPMorgan downgrades Bilibili stock to Neutral on game revenue concerns

Published 28/07/2025, 09:20
JPMorgan downgrades Bilibili stock to Neutral on game revenue concerns

Investing.com - JPMorgan downgraded Bilibili (NASDAQ:BILI) from Overweight to Neutral on Monday, while raising its price target to $24.00 from $21.00. According to InvestingPro data, the company currently trades at $23.37, with analysts maintaining an overall bullish consensus and a potential upside based on their target prices.

The downgrade comes despite Bilibili’s shares rising 30% year-to-date, outperforming both the Hang Seng Index (+27%) and KWEB (+24%), according to JPMorgan’s analysis. InvestingPro data shows even stronger performance metrics, with the stock delivering a 56.39% return over the past year and maintaining robust revenue growth of 21.83% in the last twelve months.

The firm cited concerns about Bilibili’s game revenue outlook, particularly noting that its strategy game Sanmou, launched in the second quarter of 2024, faces a high comparison base in the second half of 2025, which could cause total revenue growth to decelerate from 24%/20% in the first half to just 5% in the second half of 2025. Investors can access detailed revenue forecasts and 12 additional key insights about Bilibili through InvestingPro’s comprehensive research reports.

JPMorgan analysts revised down their 2025/2026 earnings per share estimates by 8%/18% to reflect lower game revenue expectations, while noting that Romance of the Three Kingdoms, published by Alibaba (NYSE:BABA), remains a strong competitor in China’s strategy game market.

The investment bank acknowledged Bilibili’s robust advertising revenue, which grew 20% year-over-year in the first quarter of 2025, but highlighted limited catalysts in the second half of 2025, with Three Kingdom (TADAWUL:4280) Ncard, a tactical card game targeted for launch at the end of 2025, potentially being the next growth driver.

In other recent news, Bilibili reported significant financial achievements in its first quarter of 2025, with a notable 76% year-over-year increase in gaming revenue. This growth was largely driven by the success of the game San Mou™, which has become a long-cycle franchise. Additionally, Bilibili’s advertising technology, enhanced by Artificial Intelligence Generated Content, contributed to a 30% year-over-year growth in performance ads. Analysts at Benchmark maintained their Buy rating and a $30.00 price target following these results. Meanwhile, HSBC upgraded Bilibili’s stock rating from Hold to Buy, setting a new price target of $22.50, citing the impressive performance of Sanmou Season 7 and optimistic projections for Season 8. BofA Securities also raised its price target for Bilibili to $27.00, emphasizing the company’s AI strategy and content quality. Bernstein reiterated an Outperform rating, highlighting Bilibili’s robust content strategy and its efforts to increase daily active users and time spent on the platform. These developments reflect Bilibili’s strong positioning in the market and its strategic focus on content and technology advancements.

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