Bank of America Securities analyst Sachin Salgaonkar maintained a Buy rating on Sea (SE – Research Report) today and set a price target of $160.00.
Sachin Salgaonkar has given his Buy rating due to a combination of factors that highlight the potential growth and competitive positioning of Sea’s e-commerce arm, Shopee. Despite a challenging macroeconomic environment, Shopee is expected to achieve approximately 20% growth in gross merchandise value by 2025, as online retail continues to offer more options for consumers compared to offline channels. The competitive landscape has stabilized, with key competitors like TikTok adopting a more rational approach, which is expected to continue given the current economic headwinds.
Salgaonkar also points out that Shopee’s focus on logistics and live streaming provides it with a competitive edge. The company’s strong logistics network allows it to offer free shipping, enticing more users to shop online. Additionally, Shopee’s live streaming capabilities have shown better conversion rates and higher average order values compared to competitors. These factors, along with the potential for improved margins and a roadmap to achieve 2-3% EBITDA margins, support the optimistic outlook and Buy rating for Sea’s stock.
In another report released on April 22, DBS also maintained a Buy rating on the stock with a $181.00 price target.