JPMorgan lifts Full Truck Alliance stock to Overweight; target to $18

On Thursday, JPMorgan analyst Karen Li upgraded Full Truck Alliance Co. Ltd. (NYSE:YMM) stock from Neutral to Overweight and increased the price target to $18.00, up from the previous $13.00. The revision follows Full Truck Alliance’s release of a bullish guidance for the fiscal year 2025, which suggests a year of transformation for the company. Currently trading at $13.26, the company boasts an impressive gross profit margin of 86.62% and strong revenue growth of 33.22% over the last twelve months. The firm’s FY24 results met expectations, but it was the future outlook that caught the market’s attention, particularly the company’s emphasis on margin expansion and operational efficiency.

The positive forecast has already influenced Full Truck Alliance’s stock performance, with shares rising by 13.6% the previous night, outperforming the 6.4% gain seen in Chinese ADRs. According to InvestingPro, the company has shown significant returns over multiple timeframes, with a remarkable 110% gain over the past year. JPMorgan’s analysis indicates that not all the favorable aspects are reflected in the current stock price, leading to the upgrade. The stock had been stagnant compared to JPMorgan’s earlier price target of $13, but the new guidance has unveiled further growth potential. Discover 10+ additional exclusive insights about YMM with InvestingPro.

As Full Truck Alliance continues to enhance its business model, the expectation is that the company will capitalize on its strategic initiatives to boost profitability. With a healthy P/E ratio of 28.76 and a strong current ratio of 9.03, the company’s financial position appears solid. JPMorgan projects a compound annual growth rate (CAGR) of 14% in revenue and 22% in profit over FY25-27E, with estimates approximately 5% higher than the consensus. The extended price target timeframe to December 2026 underpins the raised price target of $18, suggesting a 35% potential upside for the stock. Access the comprehensive Pro Research Report for YMM and 1,400+ other stocks through InvestingPro.

In other recent news, Full Truck Alliance Co. Ltd. reported fourth-quarter earnings for 2024 that exceeded expectations in both revenue and earnings per share. This strong performance has led several analysts to adjust their price targets for the company. Morgan Stanley (NYSE:MS) increased its price target to $15.00, maintaining an Overweight rating, while Citi raised its target to $16.50, retaining a Buy rating. Jefferies also adjusted its target to $14.50, with a continued Buy rating, citing strong growth in transaction service revenue. HSBC initiated coverage with a Buy rating and set a price target of $18.00, highlighting the potential for earnings upside and effective use of the company’s offshore cash reserves.

Analysts are optimistic about Full Truck Alliance’s strategic focus on high-margin business areas, which is expected to enhance profit margins. Citi anticipates adjusted operating profit growth exceeding 60% year-over-year, driven by increased order volumes and higher commission rates. HSBC’s analysis suggests a 27% growth in earnings per share for 2025, supported by robust commission growth and operating leverage. Despite potential challenges such as weak order growth and monetization rate issues, the overall sentiment remains positive.

These developments reflect confidence in Full Truck Alliance’s strategic direction and potential for long-term growth, with analysts closely monitoring upcoming earnings reports to validate these projections.

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