Goldman Sachs raised its Meituan-W price target to HKD116 from HKD112, maintained a Buy rating, and forecast the food delivery unit may break even as soon as the second quarter.
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Goldman Sachs lifts Meituan target to HKD116 on delivery profit outlook
Goldman Sachs raised its Meituan-W price target to HKD116 from HKD112, forecasting the food delivery unit may break even as soon as the second quarter.
The improved profitability outlook follows first-quarter results that showed Meituan's unit economics widening against its second-largest competitor, Goldman Sachs said in a report. The broker maintained its Buy rating on the stock.
Goldman Sachs forecasts core local commerce revenue to grow 5 percent year-over-year in the second quarter, with CLC earnings before interest and taxes reaching RMB3.1 billion — both above its prior estimates. The broker raised its long-term per-order profit forecast for the food delivery business to RMB1.
The maintained Buy rating and higher target price reflect growing visibility on margin recovery in Meituan's core delivery segment. The HKD116 target implies upside from the stock's current trading level.
The guidance raise signals Goldman Sachs sees structural improvement in Meituan's competitive position. Investors will watch the company's second-quarter earnings report, due in August, for confirmation of the break-even trajectory.
This article is for informational purposes only and does not constitute investment advice.
