Morgan Stanley Upgrades Youdao; Sees 78% Upside

Morgan Stanley analyst Sheng Zhong upgraded Youdao Inc DAO to Overweight from Equal Weight with a price target of $15, up from $13. The price target implies an upside of 77.8%.
Demand for learning services in China remains strong, and market leaders are "building advantages in their respective areas," Zhong tells investors in a research note.
The analyst says the worst of the regulatory clampdown is now over, stabilizing operations.
Sentiment towards the space remains low, but "the worst is over and quality names are undervalued," writes Zhong.
The analyst upgraded Youdao and TAL Education Group TAL while keeping an Overweight rating on New Oriental Education & Technology Group Inc EDU.
Price Action: DAO shares traded higher by 6.18% at $8.94 on the last check Monday.

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