Read Why Atlantic Equities Downgraded Alibaba And Cut Price Target By 24.3%

  • Atlantic Equities analyst James Cordwell downgraded Alibaba Group Holding Ltd BABA to Neutral from Overweight with a price target of $140, down from $185. The new price target implies a 21.7% upside.
  • While the stock is "inexpensive," the plans detailed at the company's recent investor event provide little confidence that Taobao and Tmall's performance will improve near term.
  • Related Content: Read Why Goldman Sachs Is Bullish On Alibaba After Its 2021 Investor Day 2
  • Further, management's commitment to "ongoing aggressive investment" has left the analyst less optimistic regarding renewed capital allocation discipline.
  • While external capital raising for some divisions "could admittedly close some of the valuation disconnect" short of an AliCloud spin, such developments "would only be modest catalysts."
  • Price Action: BABA shares traded higher by 1.64% at $116.89 in the premarket session on the last check Tuesday.
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