Bernstein analyst Robin Zhu maintained a Hold rating on NEXON Co today and set a price target of Yen2,500.00.
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Robin Zhu has given his Hold rating due to a combination of factors related to Nexon’s strategic and operational challenges. The company is facing a strategic dilemma between leveraging its strong intellectual properties like Dungeon & Fighter (DNF) and MapleStory and the need for effective staffing and marketing for new game launches. This issue is compounded by the limited success of recent titles, which have struggled with live operations and minimal support, suggesting a need for better resource allocation.
Furthermore, while Nexon has shown positive engagement in key markets such as Korea and China, the outlook for the third quarter appears softer, partly due to increased marketing expenses and staff bonuses. Despite trading at lower valuation multiples compared to its peers, the company’s growth prospects are heavily reliant on the success of new game launches. This uncertainty, along with mixed investor sentiment towards potential IP acquisitions, contributes to the Hold rating.
Zhu covers the Consumer Cyclical sector, focusing on stocks such as JD, Meituan, and JD.com, Inc. Class A. According to TipRanks, Zhu has an average return of 10.9% and a 50.49% success rate on recommended stocks.