While a level of optimism was evident given Alibaba (NYSE: BABA) pre-earnings stock market climb, the report itself, once it came out, seemingly did little other than disappoint investors.
Indeed, the Chinese e-commerce and technology giant, which has been struggling amidst efforts to reorientate toward artificial intelligence (AI) and a wider Mainland and Hong Kong market downturn, dropped 6.02% in the New York Stock Exchange within a single day after the figures were released.
Though the revenue came in somewhat stronger than expected at 221.9 billion yuan ($30.7 billion approximately) instead of the expected 219.66 billion yuan ($30.4 billion approximately), a profits drop of a staggering 86% had a major negative impact.
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Analysts react to Alibaba earnings
Unsurprisingly, investors and traders were not the only ones to have quickly reacted to the earnings report and multiple prominent analysts and analysis firms quickly reacted to Alibaba’s figures.
Perhaps the oddest sequence of BABA stock price target revision came from Truist Securities, which, on May 7, reduced the expected value from $114 to $113 while maintaining a ‘buy’ rating.
The same agency, however, reportedly lowered the price target yet again after the report was published – this time from $113 per share to a new 12-month target of $110.
CFRA Research expressed particular disappointment in Alibaba’s e-commerce and cloud business performance and set the 52-week price target at $86 while initiating a ‘hold’ rating.
CFRA’s Angelo Zino also particularly highlighted the company’s plans for a dual listing in Hong Hong as a potential effort to counter geopolitical risks and ensure continued access to international markets in case something adverse happens with regard to its place on the NYSE.
JPMorgan (NYSE: JPM) also commented on the same plan in mid-May, expressing there is a possibility BABA might be included in the ‘Stock Connect’ scheme within months.
Unlike the analyst firms and banks, a prominent technology-focused investor, Gurgavin Chandhoke, whose largest position – much like ‘The Big Short’ investor Michael Burry’s – is Alibaba shares, stated on X that his price target for the company remains at $105.
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