Cantor Sets Expectations on Two Earnings Plays: Alibaba Group Holding Ltd (BABA), Paypal Holdings Inc (PYPL)


Youssef Squali of Cantor rates stocks in the internet and media sectors and is one of the top 50 analysts rated on TipRanks. Today, Squali weighed in on Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA), and online payment company Paypal Holdings Inc (NASDAQ:PYPL), in front of their upcoming earnings releases.

Alibaba Group Holding Ltd

With Alibaba preparing to release fiscal third-quarter earnings on Thursday, January 28, Squali reiterated a Buy rating and price target of $90 on the stock.

Squali wrote, “We expect BABA’s 3Q:FY16 results, slated for 1/28, to come in line with Street expectation for a robust 22% Y/Y revenue growth. While sales on Singles day (11/11) were strong, macro concerns around China’s economy, health of the Chinese consumer and competition remain key issues. For its part, the Chinese government reported that retail sales in CY:4Q averaged ~11.1% Y/Y vs. ~10.7% in CY:3Q, implying a modest pick up in consumer spending. Longer-term, BABA remains a key beneficiary of the growing consumption of a growing middle class in China, and rising cross-border trade, in our view.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a yearly average return of 13.7% and a 56.2% success rate. Squali has a -13.6% average return when recommending BABA, and is ranked #27 out of 3586 analysts.

Out of the 21 analysts polled by TipRanks in the last 3 months, 20 rate Alibaba stock a Buy, while 1 rates the stock a Hold. With a return potential of 35%, the stock’s consensus target price stands at $95.53.

Paypal Holdings Inc

Analyst Youssef Squali reiterated a Buy rating on shares of Paypal, with a price target of $45, ahead of its upcoming earnings report on Wednesday, January 27. According to TipRanks.com, Squali has a -11% average return when recommending PayPal.

Squali noted, “We expect PayPal to report healthy 4Q results, in line with Street expectations for mid-teens revenue growth and mid-twenties EBITDA margins. MasterCard’s intra-quarter update is a has positive read-throughs for PayPal. With management’s focus on the online and in-apps opportunities, and with sustained growth in active users and deeper penetration of the merchant base, Paypal should continue to grow TPV and revenue at a healthy double-digits rate for several more years, in our view.”

Most of the analysts covering Paypal remain bullish on the company’s stock. A total of 19 analysts have provided ratings in the last 3 months; 14 of them suggest a Buy, 3 recommend a Hold rating and 2 suggest to Sell. The 12-month consensus mean price target for the stock is $42.06, reflecting a 34.81% upside over yesterday’s closing price.