In a report released yesterday, Thomas Chong from Jefferies maintained a Buy rating on H World Group (HTHT – Research Report), with a price target of $55.00.
Thomas Chong has given his Buy rating due to a combination of factors including H World Group’s robust performance in the first quarter of 2024, where revenue and adjusted EBITDA aligned with market consensus while also surpassing management’s own growth forecasts. The group demonstrated a significant year-over-year revenue increase, which outperformed their projections and exceeded estimates by Jefferies. Moreover, the company’s strategic focus on expanding its iron-triangle brands and entering lower-tier cities positions it well for market share gains within the hotel chain industry.
Furthermore, Chong’s confidence is bolstered by the company’s strong operational metrics, such as the impressive number of new hotel openings and the substantial growth in the upper-midscale segment. Despite the softer revenue guidance for the second quarter, which is already factored into the current share price, H World Group’s commitment to high quality growth and strategic expansion into new markets indicates a potential for continued success. HTHT’s strategy to diversify and improve efficiency in its economic hotels, along with its efforts to increase penetration in the midscale segment, suggests a sustainable growth trajectory that supports the Buy rating.
Chong covers the Communication Services sector, focusing on stocks such as Tencent Holdings Limited, Baidu, and NetEase. According to TipRanks, Chong has an average return of 6.0% and a 54.82% success rate on recommended stocks.
In another report released yesterday, Benchmark Co. also reiterated a Buy rating on the stock with a $64.00 price target.
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H World Group (HTHT) Company Description:
Huazhu Group Ltd. engages in the hotel operation business in China. It offers four hotel brands that are designed to target distinct segments of customers, which include JI Hotel, Elan Hotel, Joya Hotel, Starway Hotel, HanTing Hotel, Hi Inn, and Manxin Hotels & Resorts. The company was founded by Ji Qi, Wu Jiong, and Zhao Tong Tong on January 4, 2007 and is headquartered in Shanghai, China.
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