In a research report sent to investors today, Summit Research analyst Henry Guo reiterated a Buy rating on shares of Alibaba Group Holding Ltd (NYSE:BABA), but reduced the price target to $81 (from $91), after IR director Jane Penner provided cautious remarks about FQ2 GMV growth, and noted expectations have recently been lowered. Alibaba shares reacted to the news, dropping 2.07% to $62.59 as of 2:12 p.m EDT.
Guo noted, “Based on recent industry conversations further bolstered by today’s comments by Alibab’s Group IR Director, Jane Penner, we lower our revenue estimates for September quarter, and believe current street expectations on F2016 revenue may prove aggressive.” Furthermore, “September quarter GMV likely comes in mid-single-digit percentage lower than management’s expectations. Jane disclosed that the company did feel negative impact from the difficult economy, especially magnitude of user spend (lower average order). Jane’s comments are incrementally negative compared with the company’s comments on June quarter earnings call. However, Jane added that user engagement on Alibaba platforms remains strong.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Henry Guo has a total average return of -8.8% and a 16.2% success rate. Guo has a -17.7% average return when recommending BABA, and is ranked #3516 out of 3747 analysts.
Out of the 34 analysts polled by TipRanks, 31 rate Alibaba stock a Buy, while 3 rate the stock a Hold. With a return potential of 59%, the stock’s consensus target price stands at $100.21.