H World Group: Earnings Growth Stronger Than I Expected (Rating Upgrade)

Eleceed Capital673 FollowersFollow5ShareSavePlay(9min)CommentsSummaryH World Group is upgraded to buy as earnings scale faster than expected, and RevPAR growth turns positive.HTHT's asset-light strategy accelerates, with 2,444 hotels opened in FY2025 and a pipeline of 2,906 mostly franchised hotels.Legacy-DH shifts from a drag to a contributor, with Q4 adjusted EBITDA turning positive and operational improvements underway.Valuation at ~10.6x forward EBITDA, improving margins, and robust M&F growth justify upside potential to ~$70 per share.Kathrin Ziegler/DigitalVision via Getty Images Summary I downgraded to a hold rating for H World Group Limited (HTHT) in my last update because valuation was no longer attractive. Unlike my previous update, I am now upgrading to buy, as HTHT's earningsThis article was written byEleceed Capital673 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.