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<Research>JPM Trims NEW ORIENTAL-S (09901.HK) TP to $71; ST Pain for LT Gain
Recommend 15 Positive 28 Negative 8 |
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JPMorgan issued a research report adjusting its valuation model for NEW ORIENTAL-S (09901.HK) to reflect the Company's 3FQ24 results ended February, which it released in April. JPMorgan raised its forecast for future revenue by 5%, but lowered its EPS forecasts by an average of 10%, reflecting a margin forecast reset in the current fiscal quarter. JPMorgan trimmed its SOTP based target price for NEW ORIENTAL-S' H-shares to $71 from $75, equivalent to a FY2025 projected PE ratio of 23x, with rating at Overweight. NEW ORIENTAL-S is trading short-term pain for long-term gains,JPMorgan said. The report expected revenue to rise 31% YoY in 4FQ24 ended May, in line with the upper end of the Company's guidance, decelerating from super-normal 60% rise in 3Q24. However, JPMorgan cut its operating margin forecast by a relatively large 400 bps to 6.3%, reflecting the Company's planned investments, bonus to education employees, and a drag from EAST BUY (01797.HK). As a result, the report expected NEW ORIENTAL-S to report a modest YoY decline in operating profit in 4FQ24. AAStocks Financial News |
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