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Investing.com - Jefferies raised its price target on WH Group (OTC:WHGLY) Ltd (HK:288) (OTC:WHGRF) to HK$8.90 from HK$8.00 on Thursday, while maintaining a Buy rating on the stock.
The 11% increase in the price target stems from Jefferies’ upward revision of its net profit forecasts for WH Group by 7%, 8%, and 9% for 2025, 2026, and 2027, respectively, based on improved profitability assumptions.
The new price target translates to 10 times 2025 price-to-earnings ratio and 9 times 2026 price-to-earnings ratio for the global pork company, which owns major subsidiaries including Shuanghui and Smithfield Foods.
Jefferies calculates WH Group’s sum of parts valuation at USD18.3 billion, comprising USD8.5 billion for its 70.3% stake in Shuanghui, USD8.7 billion for its 92.7% ownership of Smithfield, and USD1.1 billion for the company’s European operations.
The current market capitalization of WH Group implies a 30% discount to this sum of parts valuation, before applying any holding company discount, according to Jefferies’ analysis.
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