BofA Cuts Sea’s Price Target to $125, Warns of E-Commerce Margin Headwinds
BofA cut Sea’s price target to $125 from $150, trimmed 2026–28 earnings by up to 22% and Shopee’s valuation to 20x EBITDA, citing margin pressure. Sea keeps a Buy rating with a $136 target on Shopee’s 2030 margin goal of 8–9% and fintech Monee’s sub-1.2% NPL ratio fueling EBITDA growth.
1. BofA Adjusts Valuation
BofA cut Sea’s price target to $125 from $150, trimmed fiscal 2026–28 earnings forecasts by up to 22%, and lowered the Shopee segment valuation multiple to 20x EBITDA from 30x, reflecting slower profit growth expectations.
2. E-Commerce Margin Pressure
The firm forecasts e-commerce EBITDA margins to stay under pressure in the first half of 2026 as Sea accelerates spending on fulfillment infrastructure, logistics capabilities, and customer incentives, with margin recovery expected only in the second half.
3. Gaming and Fintech Performance
Sea’s gaming division maintains strong momentum, while the fintech arm Monee boasts a stable nonperforming loan ratio of around 1.1% and could soon generate higher EBITDA than Shopee despite some margin compression.
4. Analyst Ratings and Targets
Despite cutting forecasts, Sea retains a Buy rating with a $136 price target implying 42% upside, supported by Shopee’s long-term margin expansion plan to 8–9% by 2030 and robust fintech growth.