Tencent Music downgraded to Neutral on slowing growth at JPMorgan

JPMorgan analyst Alex Yao downgraded Tencent Music to Neutral from Overweight with a price target of $7, down from $11.50. The analyst expects the company’s adjusted earnings growth will slow to mid- to high-single digits in the next 4-6 quarters, compared to 40%-80% over the past year. Such an earnings growth deceleration justifies a valuation multiple de-rating, the analyst tells investors in a research note.