Chagee Holdings Limited (CHA) is about to show us what it's got. The China-based company will release third-quarter earnings results before the opening bell on Friday, November 28, and analysts are watching closely.
Wall Street expects quarterly earnings of 40 cents per share on revenue of $458.31 million, according to market data. It's worth noting that back on August 29, Chagee posted mixed results for the second quarter, so there's some uncertainty heading into this report.
The stock had a solid day on Tuesday, climbing 6.7% to close at $14.20. That price point is particularly interesting because it matches exactly where one of the company's most prominent analyst skeptics thinks the stock should be trading.
What the Sharpest Analysts Are Saying
Two analysts with strong track records have recently weighed in on Chagee, and they're not exactly singing the same tune.
JP Morgan analyst Jessie Xu initiated coverage on November 14 with an Underweight rating and a price target of $14.20. With a 72% accuracy rate, Xu is clearly betting that the stock has already reached its fair value and doesn't see much upside from here.
Taking a more optimistic view, Macquarie analyst Linda Huang initiated coverage back on September 5 with a Neutral rating and a $19 price target. Huang, who has a 66% accuracy rate, sees about 34% upside potential from Tuesday's closing price.
The divergence in these price targets tells you pretty much everything you need to know about the debate surrounding Chagee Holdings. One analyst thinks it's fairly valued right now, while another sees meaningful room to run. Friday's earnings report could help settle which camp has the better read on the situation.
