Cantor Fitzgerald analyst Youssef Squali is weighing in today on the Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) and social networking giant Facebook Inc (NASDAQ:FB).
Alibaba Group Holding Ltd
Alibaba announced Tuesday that it will sell its U.S. online shopping site 11 Main to rival online marketplace OpenSky. In exchange, Alibaba will get a 37.6% ownership in OpenSky.
Squali noted, “Alibaba launched 11 Main in 2014 and, in our view, its sale is either a sign of failure to get meaningful traction in U.S. ecommerce market, and/or a sign of Alibaba’s changing strategic priorities. Indeed, there seems to be more emphasis on cross-border opportunities in mature and highly competitive markets such as the U.S. and Europe.”
In addition, Alibaba announced Wednesday that it will feature 11 additional countries on Tmall Global, its platform for selling foreign brands that are new to the Chinese mainland, as it looks to shore up interest in the service and expand its international e-commerce initiatives.
Squali stated, “We note that Tmall Global was launched by Alibaba last year to allow international retailers and brands without a physical presence in China to sell goods to Chinese consumers. Under the latest expansion, 11 countries including the U.S., New Zealand, Australia, Switzerland, France, Britain and Spain will launch country pavilions on Tmall Global. The country pavilions will allow consumers in China to shop for products by country.”
The analyst rates Alibaba shares a Buy with a price target of $110, which represents a potential upside of 29% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a total average return of 24.0% and a 73.0% success rate. Squali has a -9.7% average return when recommending BABA, and is ranked #6 out of 3679 analysts.
In a presentation at the Cannes Lions advertising festival in the south of France, Facebook’s chief product officer Chris Cox showed ad buyers mock-ups of an immersive ad product to marketing industry executives. Facebook’s vision is an ad that opens full screen and gives people the ability to manipulate the content – photos, videos, and even 360 degree views of the product.
Squali observed, “More innovation out of Facebook keeps us positive on the name. This is an interesting development that is sure to peek the interest of many a brand advertiser, in our view. This ad unit should further differentiate Facebook’s leading native mobile ad offering.”
Additionally, according to Business Insider, Facebook made a deal with HBO to stream two big new shows. The first episode of “Ballers” will be available on Dwayne Johnson’s Facebook page, and “The Brink” will be available on a separate dedicated page.
Squali noted, “We believe this move makes a lot of sense for Facebook as it continues to ramp its video efforts beyond a recently reported 4B video views per day.”
The analyst rates Facebook shares a Buy with a price target of $92, which represents a slight upside potential from current levels.
Out of the 46 analysts polled by TipRanks, 42 rate Facebook stock a Buy, 3 rate the stock a Hold and 1 recommends to Sell. With a return potential of 7.7%, the stock’s consensus target price stands at $94.71.