Goldman Sachs raises New Oriental's target price to 47 yuan, maintains "Neutral" rating

Goldman Sachs research report indicates that New Oriental-S (09901.HK) (EDU.US) management mentioned several key points during the Q1 FY2026 earnings call, including the expectation that K12 business revenue growth will accelerate in Q2, the group's operating profit margin will expand year-on-year during the same period, and shareholder returns next year will not be lower than this year's level.

The bank has largely maintained its revenue forecast for New Oriental for FY2026 to FY2028, with the non-GAAP net profit forecast raised by 4% to reflect an 8% increase in non-GAAP operating profit forecast, partially offset by a decrease in interest income and an increase in income tax. It maintains a "Neutral" rating, raising the target price for Hong Kong stocks from HKD 42 to HKD 47, and for US stocks from USD 54 to USD 60.

The bank also lowered its revenue forecast for EAST BUY (01797.HK) by 12% to 13%, but adjusted net profit forecast was only lowered by 2% to 3%, reflecting an improvement in profit margin forecast; it assigned a "Sell" rating, raising the target price from HKD 9 to HKD 10.2