Eddy Wang, an analyst from Morgan Stanley, maintained the Buy rating on KE Holdings Inc. Sponsored ADR Class A (BEKE – Research Report). The associated price target was raised to $27.00.
Eddy Wang has given his Buy rating due to a combination of factors that suggest a positive outlook for KE Holdings Inc. Despite the recent earnings miss attributed to one-off costs, the company is expected to benefit from the recovery of China’s property market. This recovery is anticipated to bolster the growth of both existing home (EH) and new home (NH) gross transaction value (GTV) and revenue in the upcoming quarters.
Furthermore, the projected revenue growth and the company’s operating leverage are promising, as evidenced by the raised price target from US$19 to US$27. The reduction in the weighted average cost of capital (WACC) assumption from 14% to 12% also supports this optimistic view. These factors, combined with a favorable valuation at 23 times the 2025 estimated non-GAAP price-to-earnings ratio, justify the Buy rating.
In another report released today, CMB International Securities also maintained a Buy rating on the stock with a $26.80 price target.