Nomura: Raises Meituan's target price to HKD 235, reiterates "Buy" rating

Daiwa has released a research report stating that Meituan's food delivery and local services business should benefit from the recovery in consumption, with its recent stock price outperforming the market leading to a higher valuation than its peers. The firm reiterated its "buy" rating on the company, raising the target price from HKD 160 to HKD 235. Daiwa raised Meituan's revenue forecast for next year to 2026 by 2%, and considering operating leverage, also increased its earnings per share forecast for Meituan for the same period by 3% to 5%. The firm added that Meituan's current valuation is equivalent to a forecasted P/E ratio of 20 times next year, with a PEG ratio of only 0.6 times. If the competitive landscape in local business services further stabilizes, it could drive a revaluation of the valuation. If mainland China's stimulus policies to boost consumption take effect next year, Daiwa sees room for upward revisions in its forecast for Meituan next year