Bank of America Securities analyst Ronald Leung reiterated a Buy rating on H World Group (HTHT – Research Report) on May 18 and set a price target of $47.00.
Ronald Leung has given his Buy rating due to a combination of factors including H World Group’s impressive first-quarter performance and promising growth prospects. In the first quarter of 2024, the company’s adjusted EBITDA saw a significant year-over-year increase, surpassing both management’s original guidance and Bank of America Securities’ estimates. This performance was driven by better than anticipated revenue per available room (RevPAR) growth, leased/operated revenue, hotel openings, and improved margins. The company’s China and overall revenue also exhibited robust growth, again outpacing expectations.
Furthermore, Ronald Leung’s optimism is bolstered by H World Group’s operational metrics, with a notable number of gross hotel openings which is a positive indicator for future performance. The openings exceeded historical first-quarter trends, suggesting potential outperformance against the company’s full-year guidance. Additionally, the strong demand among franchisees, indicated by the growth in hotel pipelines, underscores the brand’s resilience and appeal in the market. Despite an expected deceleration in revenue growth and RevPAR in the second quarter, the company’s outlook remains positive, justifying the Buy rating and suggesting potential upside for investors.
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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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