Citi Slashes Alibaba's Price Target By 12% As COVID Resurgence Looks To Dampen Growth

Citi analyst Alicia Yap lowered the price target on Alibaba Group Holding Ltd BABA to $177 from $200 (59.5% upside) and kept a Buy rating on the shares.
Amid the widening spread of COVID cases and city lockdowns, the analyst thinks overall economic activities in China have been negatively affected, which has drained Alibaba's profit growth.
Yap notes the COVID impact will drag into Q1 and possibly delay the recovery trend.
Alibaba has also likely slowed investment subsidies, given cost optimization efforts across internet peers.
A growing COVID-19 concern in China, with over 13,000 daily cases reported in Shanghai, led the U.S. companies in China to reduce 2022 projections.
Chinese stocks also sold off following a strength from a potential rule change that would allow Chinese companies to share sensitive data with U.S. regulators.
The financial hub and China's biggest city Shanghai experienced a stricter lockdown with the rapidly rising COVID-19 cases fuelling concerns over how the lockdowns could further impact the economy.
Price Action: BABA shares traded lower by 2.54% at $108.18 in the premarket on the last check Wednesday.