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On Wednesday, Morgan Stanley (NYSE:MS) adjusted its outlook on Super Hi (NASDAQ:HDL) shares, reducing the price target to $24.00 from the previous $25.00 while maintaining an Equalweight rating. Currently trading at $23.35, the stock has experienced a significant 16.57% decline over the past week, according to InvestingPro data. The firm’s analysts revised their revenue forecasts for the years 2025 to 2027, indicating a 3% decrease due to a slightly weaker growth outlook amid ongoing macroeconomic uncertainties.
In line with the revenue adjustment, Morgan Stanley’s analysts also revised their earnings per share (EPS) estimates, projecting a 4% decrease for the year 2025 and a 2% decrease for both 2026 and 2027. The stock currently trades at a P/E ratio of 58.2x, reflecting a premium valuation despite these downward revisions. Despite these changes, the margin forecasts for Super Hi remain largely unchanged, with the company maintaining a healthy gross profit margin of 31.65%.
The decision to lower the price target from $25 to $24 is based on the unchanged target multiple of 28 times Morgan Stanley’s 2025 EPS estimate for Super Hi. The analysts believe that the current valuation appropriately reflects the updated expectations for the company’s financial performance.
Moreover, Morgan Stanley’s analysts have also adjusted their bull and bear case scenario values for Super Hi stock. The bull case scenario value now stands at $40.00, down from the previous estimate, while the bear case scenario value has been reduced to $11.50. According to InvestingPro analysis, the stock appears undervalued at current levels, with the company maintaining a "GREAT" financial health score. These scenario values offer a range of potential outcomes that could impact the stock’s performance, depending on various factors that could influence the company’s future growth and profitability. Investors should note that Super Hi’s next earnings report is scheduled for March 27, 2025.
In other recent news, Super Hi International Holding Ltd. reported its fourth-quarter earnings, which fell short of analyst expectations. The company posted a loss of $0.02 per share, contrary to predictions for a profit. Revenue, however, increased by 14% year-over-year, reaching $208.8 million, up from $183.3 million in the same quarter last year. Despite the revenue growth, profitability was affected by higher costs, with staff costs rising 14.8% to $62.7 million and raw materials and consumables increasing by 11.4% to $61.7 million. The company did not provide specific forward guidance but emphasized its commitment to improving local restaurant management for better guest satisfaction and operational efficiency. During the quarter, Super Hi International opened four new Haidilao restaurants and closed one underperforming location, bringing its total to 122 restaurants as of June 30, 2024. Key operational metrics showed improvement, with a total table turnover rate increasing to 3.8 times per day and total guest visits rising by 14.3% to over 7.2 million. Same-store sales growth was recorded at 6.6%.
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