Morgan Stanley has stated that the narrowing losses in Meituan's instant delivery business are a positive development, and it anticipates the food delivery unit's unit economics will reach breakeven in the second quarter. However, the company's in-store business is facing competitive pressures. The firm maintains an Overweight rating on the company with a target price of HK$120.

Analysts including Gary Yu at Morgan Stanley noted in a report that they expect Meituan's second-quarter losses to widen slightly quarter-over-quarter, primarily due to the expansion of its Xiaoxiang Supermarket and investments in Keeta.

While the in-store business remains stable for now, the analysts see downside risks to profitability from intensifying competition with Douyin.