Morgan Stanley announced an upgrade for Prosus, shifting the recommendation to "overweight" from "equal-weight" and assigning a fresh target price of €51, reduced from €57. At the March 23 closing price of €40.02, the new target implies roughly 29% upside.
The bank’s call rests on the argument that Prosus is trading with a holding-company discount that has climbed to the top of its long-run range. Using Morgan Stanley analyst price targets, the stock sits at a 48% discount to the firm’s calculated net asset value (NAV); when using trading values for listed holdings, the discount is 35%.
Analysts at the firm highlighted changes in the relative valuation between Prosus and Tencent as a key factor. The discount to Tencent has expanded to 23% from 15% at the time of the November 2025 half-year results, and the discount to all listed associates is reported at 27%.
"The discount has widened to the top end of its range since the open-ended buyback was launched in 2022," the analysts said.
Tencent is by far the dominant component of Prosus’s asset base, accounting for approximately 85% of Prosus’s NAV, which Morgan Stanley puts at €149.2 billion. Following Tencent’s results, Morgan Stanley trimmed its Tencent price target to HK$650 - a 12% reduction - and that target still implies roughly 26% upside from current levels.
Tencent shares have fallen 15% year-to-date, a decline the note attributed to heavier AI-related investment that led Morgan Stanley to reduce its 2026 and 2027 EPS forecasts for Tencent by 4.8% and 5.1% respectively.
On the mechanics of Prosus’s buyback, Morgan Stanley’s tracking shows that since mid-January 2026 about 54% of the repurchase program has been funded by selling parts of the Tencent stake, with the remaining 46% coming from cash on hand.
Balance-sheet metrics remain relevant. Prosus carries roughly €5 billion in net debt. Separately, in Morgan Stanley’s sum-of-the-parts work, listed internet assets are valued at €157.5 billion and unlisted assets at €19.6 billion, set against net debt of €4.7 billion, producing an NAV per share of €80. Applying a 35% holding discount to that NAV yields the €51 target.
On buyback tax treatment, the analysts flagged that with the stock trading near €40.75 - the withholding tax threshold - the buyback is currently tax-free for the company.
Morgan Stanley’s earnings model for Prosus was adjusted to reflect recent buyback activity. FY26 EPS was raised by 6% to $4.01, the change tied to buyback volumes tracking near $7 billion versus a prior assumption of $6.1 billion. FY27 EPS was trimmed 2% to $4.64, while FY28 remains at $5.70, the latter two moves reflecting reductions to the Tencent estimates.
The research note lays out a range of outcomes: a bull case of €78 and a bear case of €30, corresponding to 25% and 50% holding discounts respectively. The bank noted that the bear-case discount "equates to a level last seen in the pre-open buyback period." Finally, Morgan Stanley’s €51 target sits below the consensus mean of €80.12.