Buy Rating for H World Group: Strategic Growth and Resilience Amidst Macroeconomic Challenges

Benchmark Co. analyst Fawne Jiang has maintained their bullish stance on HTHT stock, giving a Buy rating today.

Fawne Jiang has given his Buy rating due to a combination of factors that highlight the potential for growth and resilience in H World Group’s business model. Despite the first quarter results of FY25 being slightly below expectations, the company has shown confidence by reaffirming its FY25 guidance. This confidence is supported by a strategic focus on emerging leisure segments and B2B corporate demand, which are expected to drive future growth. Additionally, the asset-light model of H World Group provides strong operating leverage and protection against a softer macroeconomic environment.
Furthermore, the company has demonstrated resilience in leisure travel demand, with management optimistic about growth in traveler numbers and spending during key holidays. The focus on expanding its hotel network, particularly in upper-midscale and lower-tier city markets, along with the shift towards an asset-light model, is expected to support faster growth with minimal capital investment. These strategic initiatives, combined with stable new signings and efforts to enhance quality, are anticipated to drive sustained margin expansion, justifying the Buy rating and a price target of $48.

In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $47.00 price target.