JPMorgan upgrades Sea Limited to Overweight after ‘strong’ Q1

JPMorgan upgraded Sea Limited (SE) to Overweight from Neutral with a price target of $190, up from $135. The firm says the company’s “strong” Q1 results allay its concerns on macro headwinds and underscore the strength of Sea’s ecosystem in delivering growth and margin improvement. The firm cites higher earnings expectations and higher EBITDA multiples for e-commerce for the upgrade. Growing advertising spend is a reflection of value that Sea’s Shopee is bringing to its sellers and buyers and should further support platform growth while bringing in high margin revenues, contends JPMorgan. It believes Shopee’s leadership and scale “brings numerous levers to improve monetization and drive growth.”