- Susquehanna financial analyst Shyam Patil reiterates a Positive outlook for the e-commerce giant Alibaba Group Holding Ltd (BABA), but decreases the price target from $175 to $160.
- Though the company remains under pressure due to macroeconomic factors and the ongoing pandemic, Patil believes that cost-cutting measures and improvements in the Chinese macroeconomy may pay off in the long term.
- According to Patil, the company’s restructuring may be a potential long-term value driver. Each company that emerges from the restructuring will have more focused business and financing needs, as well as additional operating metrics.
- Patil sees Alibaba as the leading player in China’s e-commerce industry, with ample opportunities for secular growth in the future.
- In the fourth quarter, the company’s revenue growth rate remained stable, indicating a general stabilization in the Chinese macroeconomic environment. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were in line with Patil’s estimates and 4% above consensus as a result of cost-cutting efforts.
- Alibaba’s board approved several actions to promote growth, including a complete spinoff of the Cloud Intelligence Group, IPO exploration for Cainiao Smart Logistics Group, external financing for Alibaba International Digital Commerce Business Group, and the execution of an IPO for Freshippo.
- Price Action: On Tuesday, BABA shares were trading at $83.14 per share, a decrease of 3.44%.
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