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On Wednesday, Benchmark analysts maintained their Buy rating and $48.00 price target on H World Group Ltd. (NASDAQ:HTHT) shares, which currently trades at $36.46 with a market capitalization of $11.2 billion. The decision comes after the company reported first-quarter 2025 results that fell slightly below expectations. H World Group’s blended Revenue per Available Room (RevPAR) decreased by 3.9% year-over-year, a softer performance than analysts had anticipated. According to InvestingPro, the company maintains a strong financial health score and remains a prominent player in the Hotels, Restaurants & Leisure industry.
The company’s management, however, expressed a degree of optimism about the leisure travel sector, noting mid- to high-single-digit growth during key holiday periods. In contrast, business travel continues to face challenges, especially in the airline sector, which is still grappling with the effects of last year’s supply surge and ongoing uncertainties related to tariffs. Despite these challenges, the company has maintained a solid 5.86% revenue growth over the last twelve months. For deeper insights into H World Group’s performance metrics and growth potential, InvestingPro offers comprehensive analysis with 5 additional ProTips and detailed financial metrics.
Despite these challenges, H World Group has reaffirmed its full-year 2025 guidance, signaling confidence in the company’s core business and strategic initiatives. The company is focusing on developing emerging leisure travel segments and B2B corporate demand, which are seen as key areas for growth.
Benchmark analysts highlighted H World Group’s asset-light business model as a strength, providing strong operating leverage and protection against downturns in a softer macroeconomic environment. This model is particularly advantageous as it allows the company to adapt more easily to changing market conditions.
The reaffirmation of the $48.00 price target by Benchmark reflects a steady outlook for H World Group’s stock, as the company continues to navigate through the current economic landscape. The analysts’ maintained Buy rating, combined with a strong consensus recommendation of 1.47, suggests they believe the stock has potential for appreciation. According to InvestingPro’s Fair Value analysis, the stock appears to be currently undervalued, trading at a P/E ratio of 25.94 and offering an attractive dividend yield of 5.21%.
In other recent news, H World Group Limited (HK:1179) reported its first-quarter 2025 financial results, which fell short of analyst expectations. The company posted adjusted earnings per share of RMB2.48 ($0.34), missing the consensus estimate of RMB2.60. Revenue for the quarter reached RMB5.4 billion ($744 million), slightly below the anticipated RMB5.41 billion. Despite this, the company saw a 2.2% year-over-year increase in revenue, largely attributed to the expansion of its hotel network, with 694 new hotels opened in China during the quarter. The Legacy-Huazhu segment, excluding Steigenberger Hotels, experienced a 5.5% increase in revenue year-over-year, totaling RMB4.5 billion. However, RevPAR (revenue per available room) declined by 3.9% year-over-year to RMB208, indicating ongoing challenges. Looking forward, H World Group projects second-quarter revenue growth of 1-5% year-over-year, or 3-7% excluding its DH segment. The company also anticipates an 18-22% growth in manachised and franchised revenue for the second quarter. These developments highlight the company’s continued efforts to expand its operations despite facing macroeconomic uncertainties.
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