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On Wednesday, Morgan Stanley (NYSE:MS) demonstrated confidence in Full Truck Alliance Co. Ltd. (NYSE: YMM) by increasing the firm’s price target for the company’s stock to $15.00, up from the previous target of $14.00. The investment firm has maintained an Overweight rating on the shares, signaling a positive outlook for the company’s financial performance. The company, currently valued at $12.2 billion, has shown impressive financial health, earning a "GREAT" rating on InvestingPro’s comprehensive assessment system.
The adjustment in the price target comes after Full Truck Alliance reported fourth-quarter earnings for 2024 that surpassed expectations on both revenue and earnings per share. The company’s strong showing is attributed to robust growth in transaction service revenue, with an impressive 31.72% year-over-year growth and industry-leading gross profit margins of 80.61%. InvestingPro data reveals that 2 analysts have recently revised their earnings expectations upward, supporting Morgan Stanley’s optimistic outlook for 2025.
Analysts at Morgan Stanley have expressed optimism about Full Truck Alliance’s future, particularly due to a strategic shift in the company’s revenue composition. They predict that by reducing reliance on the lower-margin freight brokerage business, Full Truck Alliance will be able to significantly enhance its profit margins in the upcoming year. The company’s strong financial position is evident in its healthy current ratio of 7.64, indicating excellent liquidity to support its strategic initiatives. Get access to 10+ additional key insights about YMM with an InvestingPro subscription.
The research firm’s statement highlighted the company’s recent financial achievements and its potential for sustained growth. "YMM’s 4Q24 results beat on both the top and bottom lines, and we expect strong transaction service revenue growth to be sustained into 2025. With a lower revenue mix from the low-margin freight brokerage business, we see YMM achieving strong margin improvement in 2025. Maintain OW," said the Morgan Stanley analyst.
Full Truck Alliance’s performance and the revised price target by Morgan Stanley reflect a positive market sentiment towards the company’s strategic direction and its ability to generate profitable growth. The Overweight rating suggests that the firm believes the stock has a higher potential for return compared to the average of the sector.
In other recent news, Full Truck Alliance Co. Ltd. reported significant developments that have caught the attention of several analysts. The company’s fourth-quarter results for 2024 showcased notable growth in order volume and revenues, prompting Citi to raise its price target to $16.50 while maintaining a Buy rating. Jefferies also updated its price target to $14.50, noting that the company’s revenue and non-GAAP operating profit exceeded expectations. HSBC initiated coverage with a Buy rating and a price target of $18.00, citing the potential for earnings upside and effective use of offshore cash reserves.
Citi has adjusted its earnings estimates for Full Truck Alliance upward by 13% for 2025 and 11% for 2026, reflecting a rapid advancement in commission ramp-up and effective operating expense control. Jefferies expects the company’s transaction service revenue to maintain fast growth due to an increase in commissioned order growth and commission rates per order. HSBC’s operating profit estimates for 2025-2026 are 9-13% higher than consensus, driven by strong commission growth and robust operating leverage.
Meanwhile, JPMorgan downgraded Full Truck Alliance to Neutral from Overweight, despite increasing the price target to $13.00, acknowledging the company’s impressive performance and resilience. The firm highlighted the stock’s high valuation compared to sector averages, suggesting that much of the positive outlook is already reflected in the current stock price. Investors are closely monitoring these developments as the company continues to demonstrate strong financial performance and strategic initiatives.
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