Alibaba Will Be Critical Beneficiary Of China’s Reopening and Economic Recovery, Analysts Say

  • Mizuho analyst James Lee maintained Alibaba Group Holding Ltd (NYSE: BABA) with a Buy and cut the price target from $160 to $155.

  • The ongoing COVID restrictions and slow macro has extended the 2H22 GMV recovery curve.

  • As a result, GMV and CMR growth heading into the December quarter remained challenging and tracked below the Street.

  • However, management executed well on margins by reducing costs in China commerce and across all business segments, exceeding expectations during the quarter.

  • With China gradually reopening into CY23, he feels GMV growth should recover, and downward revision risks appear limited.

  • Given the slower recovery trajectory, he trimmed his F25E Consolidated EBITA by 1% to 219 billion RMB.

  • BABA is an attractive turnaround story in Lee’s coverage.

  • Barclays analyst Jiong Shao reiterated Overweight with a $114 price target.

  • With the Ch inese government having pivoted its policies on Covid in recent weeks, BABA’s September quarter results, while broadly in line, were less relevant.

  • BABA and its e-commerce peers are among the critical beneficiaries of China’s reopening and economic recovery in 2023E.

  • Citigroup analyst Alicia Yap maintained a Buy and reduced the price target from $146 to $144.

  • UBS analyst Jerry Liu reaffirmed a Buy and cut the price target from $140 to $135.

  • HSBC analyst Charlene Liu reiterated a Buy and slashed the price target from $132 to $124.

  • Benchmark analyst Fawne Jiang maintained a Buy and reduced the price target from $206 to $180.

  • Truist Securities analyst Youssef Squali reiterated a Buy and cut the price target from $125 to $120.

  • Price Action: BABA shares traded lower by 4.80% at $80.19 on the last check Friday.

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