Morgan Stanley Raises JOYY (JOYY.US) Target Price from US$40 to US$62 on Signs of Live Streaming Recovery and Attractive Shareholder Returns

Morgan Stanley has increased its target price for JOYY (JOYY.US) from $40 to $62, citing signs of recovery in the company's live streaming segment, alongside strong growth in its advertising business and robust shareholder returns. This adjustment reflects improving fundamentals, particularly a reported 1% quarter-over-quarter growth in the live streaming sector, which suggests that this area may have reached its low point during the second quarter of 2025. The firm anticipates further growth in this segment as management provided positive forecasts for revenue in the upcoming quarters.

In addition to the recovery in live streaming, Morgan Stanley points out that JOYY's advertising business continues to be a significant growth driver, having achieved more than 175% year-over-year revenue growth in 2024. The firm projects that this momentum will carry on into the second half of 2025, forecasting a 26% increase in year-over-year revenue and a consistent 20% growth rate into 2026.

Furthermore, JOYY is set to enhance shareholder value through a solid return program that includes a three-year quarterly dividend policy projected to total approximately $600 million, coupled with a share buyback initiative worth up to $300 million during 2025-2027. In the first half of 2025, the company has already allocated $135 million towards dividends and share repurchases. Morgan Stanley assumes that JOYY will maintain these annual returns to investors, totaling $300 million, as part of its commitment to enhancing shareholder value.

In summary, growth in advertising and signs of recovery in the live streaming business, combined with attractive shareholder returns, form the foundation for Morgan Stanley’s bullish outlook on JOYY.

Morgan Stanley's recent upgrade of JOYY Inc. (JOYY.US) from a target price of $40 to $62 is indicative of a potentially favorable trend for investors. This reassessment reflects a bottoming out of the company's live streaming sector, combined with promising growth in its advertising business and an attractive return strategy for shareholders.

The live streaming segment, which has faced challenges in recent quarters, appears to be on the mend according to Morgan Stanley’s analysis. After experiencing a modest 1% quarter-over-quarter growth in Q2 2025, management's optimistic outlook suggests that this could be a turning point. As the live streaming economy stabilizes, further growth is forecasted into 2026 and beyond, which could reassure potential investors looking for long-term engagement.

Meanwhile, JOYY’s advertising business has been a significant growth driver, with an impressive 175% increase in revenue year-over-year for 2024. Projections of a 26% growth in the latter half of 2025 and 20% for 2026 showcase the company's resilience and adaptive strategies in an evolving digital landscape.

The commitment to shareholder returns further enhances JOYY's appeal. The three-year plan includes approximately $600 million in dividends paired with a $300 million share repurchase program. This not only indicates confidence in the company's financial stability but also prioritizes returning value to shareholders, which is likely to attract institutional investors.

In conclusion, with improving fundamentals, robust growth prospects, and a shareholder-friendly approach, JOYY presents an attractive investment opportunity. Investors should consider this bullish outlook while remaining aware of market volatility that can influence performance.