Shares of Meituan Dianping (HK:3690) soared over 12% today after the company reported strong revenue growth amid concerns about a slump in China’s economy. The company’s revenue grew 21% year-over-year to ¥82.3 billion in Q2. This also surpassed the average analyst estimate of ¥81 billion complied by LSEG (London Stock Exchange Group).
Based in China, Meituan is an e-commerce platform that offers a wide range of products and services, including food delivery, entertainment, and travel.
Meituan Delivers Resilient Performance
Meituan delivered a resilient performance in Q2, sending a positive signal to investors despite the challenging landscape for domestic consumer spending. Revenue from its Core Local Commerce segment, which includes food delivery and Meituan Instashopping, increased 18.5% to ¥60.7 billion.
Citi analysts highlighted in their post-earnings report that Meituan’s performance confirms its effective execution and operational efficiency in navigating macroeconomic challenges.
Meituan’s Q2 total segment operating profit surged to ¥13.9 billion from ¥5.9 billion a year ago. Further, its total segment operating margin grew from 8.7% to 16.9%.
Additionally, the company revealed a $1 billion share buyback, demonstrating its confidence in future prospects.
Analysts React Positively to Meituan Results
Post-results, analyst Ronald Keung from Goldman Sachs increased his price target from HK$148 to HK$157 and maintained a Buy rating on Meituan stock. He sees an upside of over 50% in the share price.
Similarly, Bernstein raised its price target on the stock from HK$130 to HK$135, while maintaining a Buy rating.
Meanwhile, DBS analyst Tsz Wang also reiterated a Buy rating and predicted 35% upside potential for the share price.
Is Meituan Stock a Buy?
On TipRanks, 3690 stock has received a Strong Buy consensus rating based on 11 Buys and one Sell recommendation. The Meituan share price target is HK$147.73, which reflects a growth of 44% on the current trading price.
See more 3690 analyst ratings.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
