Goldman downgrades Weibo to Neutral on prolonged revenue recovery

Goldman Sachs downgraded Weibo to Neutral from Buy with a $10.60 price target. The analyst says the company’s investment case has “significantly changed” over the past year. A weaker macro and consumption environment, along with intense content competition, have resulted in a prolonged and softer advertising revenue recovery, as well as stepped-up investments in vertical content, the analyst tells investors in a research note. The firm sees this driving incremental sales and margin pressure for Weibo in 2024. Goldman believes the case for a valuation re-rating “is less clear at this point.”