Alibaba (BABA) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
https://finance.yahoo.com/news/alibaba-b...01192.html
Analysts on Alibaba: Mixed Earnings but High Hopes
https://finance.yahoo.com/news/analysts-...54760.html
Nomura Holdings, Inc.
Remaining optimistic, Jialong Shi of Nomura Holdings, Inc. wrote that “despite the unexciting results, we think BABA shares are likely to remain more resilient than peers driven by attractive valuation and abundant share buyback.”
The four-star analyst reiterated his Buy rating on the stock, and conservatively lowered his price target to $251 from $258. He added that Alibaba’s total revenue was 1% above Nomura’s expectations. On the downside, Shi noted that some subsidiaries have had their 10% tax status claim rejected, and as such will see higher rates of taxation in the near term.
Furthermore, the recent regulatory headwinds could instead materialize into drivers for upside, if investor concerns are not validated by Chinese governmental action.
Deutsche Bank
Vitus Leung of Deutsche Bank is enthused that the H1 deceleration has been digested by investors, and now the bulls can look towards H2 for well-deserved upside.
He reiterated a Buy rating on BABA, and assigned a new price target of $269 from a former $281.
Stating that now “growth is in second gear,” Leung elaborated that the missed earnings were due to the boost in share repurchases and aggressive investment in new initiatives, thus hurting cash flow.
The analyst added that year-over-year, revenue growth was 34%, which was 2% below Wall Street consensus estimates.
He, too, was less concerned about the regulatory disruptions and instead was bullish on the money spent on BABA’s investment for “sub-apps as those serve various demographics while creating stickiness for higher order frequency.”
The Benchmark Company
Fawne Jiang of the Benchmark Company was undeterred by Alibaba’s mixed results, stating, “While regulatory tightening will remain a predominant overhang on the sector in the near term, we believe BABA stock, trading at a historical trough multiple, is attractive to long-term investors.”
Jiang maintained his Buy rating for BABA, and declared a price target of $277.
Expecting a H2 acceleration in BABA’s return on investment in subsidiary ventures such as Taobao Deals, local services and Lazada, the analyst is confident that the ecommerce giant will keep pace with the growth seen by the general Chinese online retail industry.
Needham & Company
Even more bullish is Vincent Yu of Needham & Company, who dismissed the mixed earnings results as the fault of a hard comparison from the previous quarter and COVID-19. Citing “robust growth” from “new initiatives,” the analyst expects a stronger H2 for Alibaba, although losses incurred will arise on the balance sheet to come.
Yu reiterated a Buy rating on the stock, and provided a price target of $330.
The analyst believes that “Alibaba is navigating the current regulatory environment well and is poised to grow in several business areas such as ride-hailing and food delivery.” He also expects that any new regulation in the industry will help remove smaller competition for BABA.
TipRanks' Analytics
On TipRanks, BABA has an analyst rating consensus of Strong Buy, based on 22 Buy and 2 Hold ratings, and 1 Sell rating. The average Alibaba Group price target is $278.61, reflecting a potential 12-month upside of 40.3%. At the time of writing, the share price is $198.70
