Morgan Stanley Lowers Price Targets On Two Chinese Media Stocks - Sohu.com (NASDAQ:SOHU)

Earlier today, Morgan Stanley analyst, George Meng cut the firm's price target on Sohu.com Inc

SOHU

and Changyou.com

CYOU

from $53 and $23.80 to $51.50 and $22.40, respectively, while maintaining an Underweight rating for both stocks.

Sohu.com

Meng's investment thesis for Sohu included:

Concerns regarding near-term pressure to profitability due to heavy investments into online gaming including mobile games and platform strategy.
Belief that cooperation with Tencent could drive faster growth for its Sogou business and increase its position in China's search market.
Recent regulation and competition may negatively affect online video ad revenue.

Changyou.com

For Changyou, Meng noted:

Legacy games continue to trend down.
Spending and investment related to the platform is expected to continue until at least 2015.
EPS estimates cut from $1.91 to $1.71 in 2014 and from $3.59 to $3.50 in 2016.