Keybanc downgraded Tencent to "sector weight" from "overweight"
The shares of China-based streaming specialist Tencent Music Entertainment Group (NYSE:TME) are down 3% to trade at $12.75 following a downgrade from Keybanc to "sector weight" from "overweight." The analyst pointed to regulatory headwinds surrounding its lucky draw feature, and ongoing competition from the short video sector.
The bear note has TME trading just south of its 50-day moving average, which just caught a late-January pullback. The equity has also struggled against the newly formed 200-day trendline, which rejected Tencent's turn higher just yesterday. On the other hand, TME is still floating atop its year-to-date breakeven as it also battles coronavirus headwinds.
As far as the rest of the brokerage bunch is concerned, sentiment is mostly bullish. Prior to today, seven in coverage considered TME a "strong buy," compared to only two "hold" ratings. Meanwhile, the consensus 12-month price target of $15.67 is a healthy 18.8% premium to last night's close.
While short interest has begun to decline within the last two reporting periods, down 7.1%, bears are still firmly in control. In fact, the 36.27 million shares sold short represent a solid 11.9% of the stock's available float, or almost a week's worth of buying power at TME's average daily pace of trading.