News summary
Morgan Stanley predicts SJM Holdings 'EBITDA will increase to HK$3.7 billion in 2024-2026roulettewheelgoogle, raise target price to 2roulettewheelgoogle.25 HKDroulettewheelgoogle, the rating is "undervalued", taking into account geographical location factors.
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Morgan Stanley raises SJM Holdings target price and raises EBITDA forecast
Morgan Stanley said in its latest research report that it has lowered its target price for SJM Holdings (00880) from 2roulettewheelgoogleHK$.15 was raised to HK$2.25, an increase of 4.7%. The move is based on forecasts for EBITDA in 2024 and is expected to increase to HK$3.7 billion, equivalent to 87% in 2019.
Forecasts show that by 2025, SJM Holdings 'EBITDA is expected to further increase to HK$4.5 billion, and will climb to HK$5.2 billion in 2026, both exceeding 2019 levels. Based on this, Morgan Stanley also raised the company's earnings per share forecast from 2024 to 2026 by 13%, 4% and 7% respectively.
Although Morgan Stanley raised SJM's EBITDA forecast and made a positive assessment of the company's fundamentals, the rating remains "understated". The analysis pointed out that although the hotel facilities of Grand Lisboa Resort (GLP) are of high quality, factors such as its geographical location may limit its performance.
Finally, Morgan Stanley's basic assumption for SJM Holdings is that the industry recovery will be in line with expectations, and Macau's midfield revenue is expected to return to 110% of 2019 levels in 2024.