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Ali Baba (Baba), stocks fell nearly 3% Friday, after the Chinese giant e – commerce had lowered its forecast of turnover for the year due to concerns about the business. economic impact of a US-Chinese commercial spat, which should, according to the company, weigh on its income its high season of sale.
Specifically, the company has reduced its target annual revenue forecast from 4 to 6 percent, in the range of 375 billion to 383 billion RMB. In addition, the company did not meet market expectations since it achieved a turnover of 85.15 billion RMB ($ 12.4 billion) in the second quarter of 2019, a figure slightly lower than the estimated consensus of 86.7 billion RMB. To the credit of the company, second-quarter earnings per share of 9.60 yuan (US $ 1.40) were well above Street's forecast of 7.43 yuan.
In response, SunTrust's senior analyst, Youssef Squali, reiterates the purchase price of Alibaba shares, while lowering the price target to US $ 180 (up from US $ 195), which represents upside potential 21% compared to the current market.
According to TipRanks, which measures the success rate of analysts and bloggers according to the behavior of their calls, analyst Youssef Squali records an average annual return of 19.2% and a success rate of 66%. Squali has a 16.2% average performance when BABA is recommended, and ranks 69th out of 4908 analysts.
Squali wrote: "We are maintaining a buy thesis and bullish thesis of LT on BABA, but we are lowering our estimates / PT to 195 USD from 195 USD due to greater macroeconomic uncertainty, and the decision to the company postpone the monetization of additional stocks from the new referral stream to protect ROI traders. Growth in core business remains strong, benefiting from market share gains and stable margins to fund new initiatives. If the macroeconomic situation deteriorates, growth and margins may also worsen, but BABA's dominant position online, diversification / diversification of its offering and ongoing China's modernization / digitization of consumption should allow BABA to outperform.
"We are refining our estimates / PT to reflect the second quarter results and the latest exchange rates. For Exercise 19, we are now waiting for rev. / EBITA / adj. BPA CNY 378.92B / 106.10B / 33.58 vs CNY 390.95B / 121.32B / 34.70, previously. Our top line estimate assumes consolidated growth of 51.4% year on year and organic growth of 40.9%, "added the analyst.
Net Net, most analysts Wall Streets wish the retail giant is a winning stock, while TipRanks analytics BABA presents as a strong purchase. Of the 22 analysts polled by TipRanks, the 22 analysts are optimistic. The 12-month average price target is $ 218.27, an increase of nearly 48% over the current market. (See BABA's price targets and analyst ratings on TipRanks)
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