Jefferies lifts BYD stock price target to HK$447, maintains Buy rating

On Tuesday, Jefferies analyst Johnson Wan increased the price target for BYD Co Ltd (002594:CH) (OTC: OTC:BYDDY), a leading electric vehicle manufacturer with a market capitalization of $153.5 billion, to HK$447.00 from the previous HK$426.00, while reiterating a Buy rating on the company’s shares. The adjustment follows BYD (SZ:002594)’s fourth-quarter earnings report, which revealed both revenue and net profit growth, with figures reaching RMB275 billion and RMB15 billion, respectively. This performance marks a year-over-year increase of 37% in revenue and 29% in net profit. According to InvestingPro data, BYD has demonstrated impressive momentum with a 100% return over the past year and nearly 57% YTD.

The company’s vehicle unit profit remained relatively stable quarter-over-quarter at RMB9,300. However, BYD experienced a gross margin pressure in the fourth quarter, with gross profit margin (GPM) declining to 17% from 21.2% in the third quarter. This drop was attributed to a reclassification of RMB12.4 billion in warranty costs, which were moved from selling expenses to the cost of goods sold (COGS).

During an analyst briefing held on March 25, BYD management shared their targets for the future, aiming to reach 5.5 million units in sales by the year 2025. This briefing, which was an offline event accessible only in person, provided analysts with insights into the company’s strategic objectives and operational plans moving forward.

The price target increase by Jefferies reflects confidence in BYD’s growth trajectory despite the margin pressures faced in the latest quarter. The company’s ambitious sales goal for 2025 suggests a significant expansion of its market presence in the electric vehicle industry. The maintenance of the Buy rating by Jefferies aligns with the broader analyst consensus, which remains strongly positive. InvestingPro analysis suggests the stock is currently trading near its Fair Value, with additional insights available through 12+ exclusive ProTips and comprehensive financial metrics.

In other recent news, Bernstein analysts have reaffirmed their Outperform rating for BYD Co Ltd with a price target of HK$350. This endorsement highlights the company’s competitive cost structure and strong research and development capabilities. Bernstein’s analysis suggests that BYD is well-positioned to maintain its market share leadership in China. The firm projects ambitious sales volumes for BYD, anticipating deliveries of 5.1 million units in 2025 and 5.7 million units in 2026. These figures include significant sales in overseas markets, with expectations of 0.7 million units in 2025 and 0.8 million units in 2026. Earnings per share are projected to reach RMB 13.61 in 2024, RMB 17.85 in 2025, and RMB 20.32 in 2026, indicating a positive earnings trajectory. Bernstein’s valuation reflects confidence in BYD’s future performance, using a sum-of-the-parts method corresponding to 16 times the projected 2026 EPS. These developments underscore BYD’s potential for growth both domestically and internationally.

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