Bank of America Securities lowers Weibo's target price to $8.70, expects continued pressure in the fourth quarter

Bank of America Securities published a research report, predicting that Weibo (WB.US) will face pressure on its advertising revenue in the third quarter due to continued weakness in online gaming and mobile advertisers, as well as soft spending from fast-moving consumer goods advertisers due to last year's high base.

The firm has further lowered its total revenue forecast for Weibo's third quarter from an original expected year-on-year decline of 4% to a decline of 6%, and has reduced its adjusted net profit forecast to $106 million. Due to the downward revision of earnings estimates, the target price has also been lowered from $9 to $8.7, reiterating a "underperform" rating.

Additionally, based on channel surveys, the firm indicated that due to weak consumption during Double 11, the advertising market in the fourth quarter may weaken, and advertising spending in Weibo's key advertising areas is also weak. Therefore, the firm holds a cautious outlook on Weibo's fourth quarter prospects, lowering its revenue forecast for the period from an original expected year-on-year decline of 2% to a decline of 5%, with the adjusted net profit forecast reduced to $96 million