Will Tencent Music Entertainment Group-sponsored ADR (TME) gain due to rising earnings estimates?

Tencent Music Entertainment Group Sponsored ADR (TME) looks like an attractive choice given the company’s noticeably improved earnings outlook. The stock has been a strong performer lately, and the momentum could continue as analysts further raise their earnings estimates for the company.

The upward trend in estimate revisions, which is the result of growing analyst optimism about the company’s earnings outlook, should be reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Our stock rating tool – the Zacks Ranking – has this idea at its heart.

The five-tier Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally audited track record of outperformance, with stocks ranked Zacks #1 generating an average annual return of +25% since 2008.

For the Tencent Music Entertainment Group-sponsored ADR, there was strong agreement among hedge analysts to raise earnings estimates, which helped push consensus estimates up significantly for the next quarter and year. complete.

The chart below shows the evolution of the Zacks Consensus forward EPS estimate over 12 months:

12 month EPS

Revisions to current quarter estimates

The earnings estimate of $0.10 per share for the current quarter represents a change of +11.11% compared to the figure published a year ago.

In the last 30 days, two estimates increased for Tencent Music Entertainment Group Sponsored ADR compared to no negative reviews. As a result, the Zacks consensus estimate has increased by 45.46%.

Revisions to estimates for the current year

The company is expected to earn $0.39 per share for the full year, which is a 0% change from the prior year.

There has also been an encouraging trend in revisions to estimates for the current year. Over the past month, two estimates have risen for Tencent Music Entertainment Group sponsored ADR compared to no negative reviews. This bumped up the consensus estimate by 25%.

Favorable ranking of Zacks

Thanks to promising rating revisions, the Tencent Music Entertainment Group-sponsored ADR currently carries a Zacks rank #2 (buy). The Zacks Ranking is a proven scoring tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.


Although strong estimate revisions for the Tencent Music Entertainment Group-sponsored ADR have attracted decent investment and pushed the stock up 20.2% in the past four weeks, the stock may still remain on the upside. . So you can consider adding it to your portfolio right away.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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