- Analysts cut their price targets on Alibaba Group Holding Ltd (NYSE:BABA) ahead of its quarterly results. However, they continue to see double-digit upside in the stock.
- Stifel analyst Scott Devitt lowered the price target on Alibaba to $150 from $170 (28% upside) and reiterated a Buy rating.
- The re-rating follows the previewed results for his China e-commerce coverage ahead of the December quarter reports from the group.
- Devitt lowered his current-quarter revenue growth estimate to 12.1% from 15.5% year-over-year to reflect slower than previously modeled revenue stemming from slower growth in discretionary categories, citing National Bureau of Statistics data.
- He also reduced his FY22 revenue growth estimate to 19.8% from 21.7% year-over-year to reflect overall weakness and uncertainty in the Chinese macroeconomic environment.
- Truist Securities analyst Youssef H. Squali lowered the price target on Alibaba to $180 from $200 (54% upside) while reiterating a Buy rating on the shares as part of a broader research note on the Internet and Digital Media.
- Following the recently published Chinese Stats Bureau's online physical goods sales data showing +5% Y/Y growth in the December quarter, he has reduced his Q3 revenue estimates to RMB 239 billion vs. consensus of RMB 249 billion.
- Longer-term, however, Squali "remains impressed" by Alibaba's "massive opportunity" in China and Southeast Asia.
- Price Action: BABA shares traded lower by 1.96% at $116.80 on the last check Wednesday.
