Analysts are weighing in on the Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) and fast-food giant McDonald’s Corporation (NYSE:MCD). The analysts reflect on Alibaba’s singles day and on McDonald’s Investor Day.
Alibaba Group Holding Ltd
In a research report issued today, Deutsche Bank analyst Alan Hellawell reiterated a Buy rating on shares of Alibaba, with a price target of $98, after the company reported that it generated more than $3.9 billion in gross merchandise volume within the first hour of its China’s Singles’ Day sale.
Hellawell noted, “The successful implementation of multiple strategies adopted by Alibaba seems to have driven Singles Day 2015 beyond the 40% growth expectation laid out in our Nov 8th report “Singles Day 2015: a buyer’s guide”. Total GMV surpassed last Singles Day’s GMV of RMB57.1b before noon and reached ~RMB63.6b by 2pm. GMV could rise well above DBe of RMB80 to RMB90-100b. Improved back-end and front-end logistics have been instrumental. We believe some 86,000 transactions processed per second at peak today, a major improvement over 2014. As we look forward, we expect monetization rate to trend up nicely thanks not just to this massive promotional event but the more gradual increase in ad slots on PC and mobile. We lift FY16/17/18 GMV and take rate to reflect these favorable trends.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alan Hellawell has a total average return of 31.2% and a 56% success rate. Hellawell has a 4.2% average return when recommending BABA, and is ranked #144 out of 3840 analysts.
Out of the 33 analysts polled by TipRanks, 30 rate Alibaba Group stock a Buy, while 3 rate the stock a Hold. With a return potential of 19%, the stock’s consensus target price stands at $96.90.
Oppenheimer analyst Brian Bittner came out with a research note on shares of McDonald’s, reiterating a Perform rating, after the company hosted its investor event in New York Tuesday.
Bittner observed, “The Investor Day showcased a refocused management team’s strategy to turn around the business and enhance shareholder value. The main takeaways were: 1) an update that 4Q comps are trending above industry for the first time in over a year; 2) ’16 operating profit guidance (+5-7%) in-line with consensus; 3) refranchising target increased to 95% (from 90%); 4) G&A reduction target increased to $500M (from $300M); 5) adding 10B debt (leverage to 3x from 1.75x) for accelerating capital returns; and 6) decision of no REIT transaction after an exhaustive analysis.”
The analyst concluded, “MCD is taking many steps to improve operations and enhance shareholder value with a very competent CEO leading the charge. We are slightly tweaking our ’15E/’16E EPS to account for updated SSS, margin and G&A assumptions.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Bittner has a total average return of 11.6% and a 60.7% success rate. Bittner is ranked #171 out of 3840 analysts.
Out of the 19 analysts polled by TipRanks, 11 rate McDonald’s Corporation stock a Buy, while 8 rate the stock a Hold. With a return potential of 1.5%, the stock’s consensus target price stands at $114.88.