Alibaba fell to $82.23 as Oppenheimer lowers target price of stock.
Oppenheimer’s analyst Ella Ji first initiated coverage of Alibaba with an Outperform rating in November 2014, whilst also giving the online retailer a huge $133 price target, just below the highest analyst price target of $135 from all other brokerage firms on Wall Street.
On Wednesday this week, Oppenheimer’s analyst Ji gave her latest target for the online retailer at $105, reduced from the previous $112. The analyst stuck with the ‘outperform’ rating saying, "We stay bullish on Alibaba's long-term growth potential yet adjust down our estimates based on recent business updates."
The Oppenheimer statement comes after a report from SAIC, the State Administration for Industry and Commerce, with Ji noting that, “Following the SAIC report, BABA has stepped up measures in cracking down counterfeit products and strengthening controls, signaling some NT adjustments in GMV growth. The continued strong demand for long-tail keywords, the ongoing mix shift to mobile, and the suspension of online lottery sales will also likely hurt blended take rate in the coming quarters.”
The last time SAIC were involved in Alibaba was in January 2015 when the organization issued a white paper alleging that Alibaba was selling fakes on its site and that staff were taking bribes; at this point Alibaba shares dropped by 4.4% with additional falls of 8.8% on poor revenue from quarterly reports in December issued the day after the SAIC paper.
Oppenheimer’s latest analysis represents a 27.49% upside with Ella Ji and Fiona Zhang rating the stock as a BUY. Alex Yao from JP Morgan also gives Alibaba a BUY rating due to the stock being at such a low price, any news will be good news for Alibaba.
MT4 chart: ALIBABA
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