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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