- Morgan Stanley analyst Praveen Choudhary downgraded GreenTree Hospitality Group Ltd GHG to Equal Weight from Overweight with a price target of $7.50, down from $17, suggesting an 11% upside.
- The analyst sees "several risks" that could result in the stock's valuation remaining "cheaper for longer."
- The risk factors include a decline in earnings growth, competition in lower-tier cities, and the company's extended loans to franchisees.
- GreenTree's investment in "asset-heavy L&O, while necessary, is earnings dilutive," Choudhary noted.
- Price Action: GHG shares closed higher by 0.30% at $6.72 on Friday.
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