Jefferies cuts KE Holdings price target to $26, maintains Buy

Published 18/03/2025, 19:40
Jefferies cuts KE Holdings price target to $26, maintains Buy

On Tuesday, Jefferies analyst Thomas Chong adjusted the price target for KE Holdings (NYSE:BEKE) stock, reducing it to $26.00 from the previous target of $30.00, while reiterating a Buy rating for the company. The revision followed KE Holdings’ fourth-quarter results, which saw gross transaction value (GTV) and revenue surpass expectations. However, non-GAAP earnings fell short, influenced by a one-off accrual. According to InvestingPro data, the company has demonstrated strong momentum with an 81.73% return over the past year and maintains a healthy financial position with more cash than debt on its balance sheet.

KE Holdings, a leading player in the Chinese real estate sector with a market capitalization of $27.53 billion, demonstrated a robust market share gain, particularly in the new home segment, which is anticipated to outpace the growth of existing home sales in the first quarter. Chong’s analysis took a more cautious stance on net margin projections due to increased headcount and incentives offered to agents. InvestingPro analysis reveals the company maintains strong fundamentals with a revenue growth of 11.06% and sufficient cash flows to cover interest payments. For deeper insights into KE Holdings’ financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

The company’s use of artificial intelligence (AI) has been pivotal in enhancing agent performance and aiding home buyers in their decision-making processes. Chong expects KE Holdings to persist in its strategic approach known as the One Body Three Wings Strategy, which has been central to its business model.

Despite the earnings miss, the company’s strategic initiatives and the application of AI technology are seen as positive indicators for its future growth. The maintained Buy rating suggests that Jefferies continues to see value in KE Holdings shares even with the adjusted price target. KE Holdings’ commitment to leveraging technology for market expansion and efficiency is expected to remain a key driver of its performance.

In other recent news, KE Holdings Inc. announced that its Class A ordinary shares have been included in the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs. This inclusion allows investors in Mainland China to trade KE Holdings shares through cross-boundary investment channels linking Hong Kong and Mainland Chinese stock markets. The development is expected to increase the liquidity of KE Holdings’ shares and broaden its investor base by providing easier access to Mainland Chinese investors. XU Tao, Chief Financial Officer of KE Holdings, remarked that this marks an important milestone for the company and believes it will enhance their visibility in the capital markets. The company’s participation in these Stock Connect programs is effective immediately. The inclusion reflects KE Holdings’ growing prominence and recognition in the real estate sector. These recent developments are based on a press release and aim to provide investors with the latest information regarding KE Holdings’ market accessibility.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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