BofA Securities lowered its price target on Sea Ltd. (NYSE:SE) to $125 from $150 while maintaining a Buy rating. Shares fell more than 3% intra-day Monday.
The firm noted that Sea’s share price has declined roughly 30% year-to-date, compared with a 3.7% drop in the Nasdaq, largely due to investor concerns about rising competition in e-commerce and resulting increases in investment spending that have led to downward revisions to consensus earnings forecasts.
While expectations have been reset lower, the analyst said visibility into margin improvement for the company’s e-commerce segment remains limited because spending levels will depend heavily on competitive dynamics.
For 2026, BofA expects e-commerce EBITDA margins to remain under pressure during the first half of the year as the company continues investing in fulfillment infrastructure, logistics capabilities, and customer incentives such as discounts and coupons. The firm anticipates margins at Shopee will begin recovering in the second half of the year as these investments taper following a front-loaded spending cycle.
Meanwhile, Sea’s other two business segments — gaming and fintech — were described as maintaining strong momentum. The analyst estimated that the fintech unit, Monee, could generate higher EBITDA than Shopee despite some margin compression due to its rapid growth.
BofA also noted that it has not observed meaningful non-performing asset risks within the fintech portfolio.
The firm reduced its fiscal 2026–2028 earnings forecasts by 17% to 22% to reflect lower expected margins and higher taxes. It also cut its valuation multiple for the e-commerce business to 20x EBITDA from 30x, citing slower expected profit growth.
Despite lowering the price target, BofA reiterated its Buy rating, arguing that consensus estimates have already been significantly reduced and that further downside risk appears limited following the stock’s recent correction.
