Intel stock extends gains after report of possible U.S. government stake
On Monday, Morgan Stanley (NYSE:MS) analysts initiated coverage on Chagee Holdings (NASDAQ: CHA) with an Overweight rating and set a price target of $37.50. Currently trading at $28.01, the stock sits near its 52-week low of $27.21, while InvestingPro analysis suggests the company is undervalued. The analysts highlighted Chagee’s strong presence in the freshly brewed tea market and its leadership in the premium segment based on store count and gross merchandise value (GMV).
The analysts expressed optimism about Chagee’s growth potential, stating that the company is in a phase of increasing brand power. This optimism is supported by impressive financial metrics, including a 167% revenue growth in the last twelve months and a healthy gross profit margin of 47.76%. They anticipate that Chagee’s GMV growth will surpass that of its industry peers, attributing this to a more favorable payback period and improved store operating margins.
Chagee’s per-store GMV is expected to stabilize, supported by the quality of its products and strategic investments in brand development aimed at attracting consumers. The analysts also noted the potential for Chagee’s business model to be successfully replicated in international markets, presenting additional growth opportunities.
The report mentioned that Chagee’s stock is currently trading at 13 times the estimated 2025 price-to-earnings ratio, which is considered a discount compared to its peers. With a current P/E ratio of 14.14 and an overall financial health score rated as "GREAT" by InvestingPro, Morgan Stanley finds this valuation appealing, given Chagee’s leading market position in the premium category and its prospects for global expansion. For deeper insights into Chagee’s valuation metrics and growth potential, investors can access over 30 additional financial indicators and expert analysis through InvestingPro.
In other recent news, Chagee Holdings Limited has announced the pricing of its initial public offering (IPO) at $28 per American Depositary Share (ADS). The company aims to raise approximately $411.2 million through the sale of 14,683,991 ADSs, each representing one Class A ordinary share. Trading is expected to commence on the Nasdaq Global Select Market under the ticker symbol CHA. The IPO has attracted a consortium of underwriters, including Citigroup (NYSE:C) Global Markets Inc., Morgan Stanley Asia Limited, and Deutsche Bank AG (ETR:DBKGn), Hong Kong Branch. Additionally, Chagee has granted underwriters a 30-day option to purchase up to an additional 2,202,598 ADSs to cover any over-allotments. The closing of the IPO is anticipated to occur on April 21, 2025, subject to customary closing conditions. This development marks a significant step for Chagee Holdings as it seeks to expand its presence in the global market.
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