Alibaba Drops Nearly 6% as Analysts Cut Price Targets
Barclays analyst Gregory Zhao cut his price target for Alibaba Group Holding Ltd.'s stock to $210 from $225.
Shares of Alibaba Group (NYSE:BABA) dropped nearly 6 percent as Morgan Stanley, Barclays, Raymond James, KeyBanc Capital, and Deutsche Bank analysts all turned bearish on this China's e-commerce giant.
Barclays analyst Gregory Zhao cut his price target for Alibaba Group Holding Ltd.'s stock to $210 from $225 citing investments in some of the company's new initiatives, such as new retail, Ele.me and Cainiao, and data showing China online sales slowed slightly in July and August.
Aaron Kessler at Raymond James cut his near-term profit estimates on Alibaba because of "China's macro forces and expectations of somewhat delayed monetization on the new Taobao interface." In the report, he trimmed next year's earnings per share ratio and sales estimates and lowered Alibaba's price target from $280 to $260. Kessler, however, maintained a "buy" rating and said that right now, the valuation of Alibaba was quite attractive. "We continue to believe the new interface will be a key driver of improved take rates and serve as a catalyst for shares," said Kessler.
At the same time, KeyBanc Capital cut its Alibaba stock price target to $215 from $220, citing lower expectations for its core business, while Deutsche Bank analyst Han Joon Kim dropped his estimate from $196 to $189 because of lower GMV expectations.
Earlier this week, Morgan Stanley's analyst Grace Chen also lowered Alibaba's target price from $240 to $220 in a research note issued Tuesday. She said she expected Alibaba to reports sales that were 3 percent below consensus because of weaker retail and digital entertainment sales.
The stock price of Alibaba has plunged more than 25 percent this year in the midst of macro uncertainties. It fell to a 15-month low today in New York to close at $138.29 per American depositary share.