, an analyst from UBS, reiterated the Buy rating on Full Truck Alliance. The associated price target is $14.50.
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UBS has given its Buy rating due to a combination of factors that highlight Full Truck Alliance’s potential for growth in the dedicated less-than-truckload (LTL) segment in China. The current online penetration in this segment is significantly lower compared to the on-demand full truckload (FTL) segment, suggesting ample room for growth. UBS believes that collaboration between freight platforms and dedicated LTL companies can enhance revenue and profitability by sharing freight orders and fulfillment capacity, positioning Full Truck Alliance as a key integrator in this space.
Furthermore, UBS notes that despite macroeconomic challenges, the dedicated LTL segment has stagnated, offering an opportunity for growth through strategic partnerships. Full Truck Alliance’s extensive geographic coverage and experience in the intra-province LTL segment make it well-suited to capture market share. UBS forecasts a potential enhancement in earnings by 8-10% by 2027/28 if the company successfully penetrates the dedicated LTL segment. With a forward price-to-earnings ratio of 18x and an expected earnings CAGR of 18% from 2024 to 2028, UBS reiterates its Buy rating, anticipating near-term catalysts from upcoming results.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $14.00 price target.