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Investing.com - Goldman Sachs downgraded Minth Group Ltd. (425:HK) (OTC:MNTHF) from Buy to Neutral on Thursday, while simultaneously raising its price target to HK$33.50 from HK$27.60.
The investment bank adjusted its 2025-2027 net income estimates for the auto parts supplier upward by as much as 13%, citing better-than-expected selling and marketing expenses in the first half of 2025 and lower projected operating expenses for the coming years.
The new price target represents a potential 9% upside from current levels and is based on a 12X average of 2025-2026 price-to-earnings multiple, compared to the previous target which used only 2025 estimates.
Goldman Sachs noted that Minth currently trades at 11 times its 12-month forward P/E ratio, which aligns with historical mid-cycle levels, suggesting limited room for further valuation expansion.
The downgrade reflects Goldman’s expectation that global auto demand is peaking in key markets, with growth projected to slow from 6% in 2023/2024 to 1% in 2025/2026 and then decline by 2% in 2027/2028, which would cause Minth’s net profit growth to decelerate from 24% to 15% and then 11% in corresponding periods.
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