JPMorgan cuts Sea Limited target, opens ‘Negative Catalyst Watch’

JPMorgan lowered the firm’s price target on Sea Limited to $40 from $42 and keeps a Neutral rating on the shares. The analyst also placed Sea shares on “Negative Catalyst Watch” ahead of the Q4 results on March 4. The firm believes Sea’s Q4 e-commerce adjusted EBITDA could miss the median buy-side expectations. Its e-commerce adjusted EBITDA loss forecast of (329M) compares to range of buy-side EBITDA loss expectations of (240M)-(340M). The analyst also forecasts a quarter-over-quarter decline in gaming and fintech EBITDA. An earnings miss could result in the stock price decline of 10% or higher, the analyst tells investors in a research note.