H World Group Ltd (HWORLD-S) saw its stock price surge 6.14% in Friday's pre-market trading, despite reporting lower-than-expected earnings for the quarter ended December 31. The company's shares continued their strong performance, having already risen 15.8% this quarter.
While H World Group's adjusted earnings per share of 2 fen fell short of the 17 fen expected by analysts and were significantly lower than the 23 fen reported in the same quarter last year, investors appeared to focus on the company's revenue growth. The hotel operator reported a 7.8% year-over-year increase in revenue to CNY6.02 billion, surpassing the analyst consensus of CNY5.71 billion.
The market's positive reaction may also be attributed to the continued bullish sentiment among analysts. Despite the earnings miss, the current average analyst rating on H World Group shares remains a "buy," with 15 out of 16 analysts recommending either "strong buy" or "buy." The average 12-month price target for the stock stands at HK$33.85, suggesting further upside potential. As the travel and hospitality sector continues to recover, investors seem optimistic about H World Group's future prospects, focusing on its revenue growth and market position in the competitive hotels, motels & cruise lines peer group.
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