Analyst Ronald Leung from Bank of America Securities maintained a Buy rating on Atour Lifestyle Holdings and keeping the price target at $38.30.
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Ronald Leung has given his Buy rating due to a combination of factors that suggest potential growth and stability for Atour Lifestyle Holdings. Despite a recent dip in share price attributed to profit-taking and sector rotation, Leung believes these concerns are short-term and unlikely to impact the company’s long-term performance. The stock is currently trading at attractive valuations with a projected earnings per share compound annual growth rate of 21% from 2024 to 2026 and a 5% capital return through dividends and buybacks.
Leung also highlights Atour’s strategic focus on quality over quantity in hotel openings, which aligns with maintaining brand integrity. The company’s pipeline remains robust, with strong franchisee demand and a target of 500 hotel openings by 2025. Additionally, Atour’s consideration of a second listing in Hong Kong could enhance trading liquidity without the need for additional capital, given its strong balance sheet. These factors, along with better-than-expected retail revenue growth, support Leung’s optimistic outlook on Atour’s stock.
In another report released on September 29, Jefferies also initiated coverage with a Buy rating on the stock with a $48.00 price target.