H World Group: Strategic Initiatives and Stable Growth Support Buy Rating

H World Group (HTHT – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Ronald Leung from Bank of America Securities reiterated a Buy rating on the stock and has a $47.00 price target.

Ronald Leung has given his Buy rating due to a combination of factors related to H World Group’s financial performance and strategic initiatives. The company’s first-quarter adjusted EBITDA was largely in line with expectations, showing a 5% year-over-year increase, while revenue grew by 2% year-over-year, aligning with management’s guidance. This performance indicates stability and potential for growth despite challenges in the domestic market.
Additionally, the management’s guidance for the second quarter suggests continued revenue growth and a narrowing decline in RevPAR, reflecting a positive outlook. The company is also focusing on quality over quantity in its hotel openings, maintaining a strong pipeline and stable franchisee sentiment. Furthermore, strategic cost-cutting and asset-light transitions are expected to lower the overall cost base in the medium term. These factors, combined with H World Group’s strong execution and market share potential, support the Buy rating with a price objective of $47.

In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $46.00 price target.