Shanda Games Ltd. (GAME:US) gained the most in New York in six weeks as investors bought shares of the Chinese online games operator which is set to report earnings tomorrow.
The Shanghai-based company climbed 3.2 percent to $4.17 as of 1:21 p.m. New York time, poised for its biggest gain since April 27. Shanda, which had fallen 22 percent this quarter through June 8, may report (GAME:US) adjusted earnings per American depositary shares of 23 cents on sales of $220 million, according to a Bloomberg survey of two analysts.
“Expectations are low and valuations are modest, so if they can beat forecasts by a couple of cents and give better- than-expected guidance, the stock may pop,” Adam Krejcik, an analyst at Roth Capital in Newport Beach, California, said in a phone interview. “Like a lot of their peers, Shanda has found it difficult to produce new games that are incremental and popular.”
Shanda trades at 5.9 times reported earnings, near its lowest level since March 5. Krejcik has a neutral rating on Shanda with a 12-month price target of $4.50.
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