Alibaba Group will report its fiscal Q3 results on February 7, 2024. Last quarter, Alibaba reported strong performance with Q2 adjusted EPS of $2.14, topping the consensus forecast of $2.11. The company also announced the expansion of U.S. restrictions on the export of advanced computing chips, creating uncertainty for the prospects of its Cloud Intelligence Group. Following the report, Barclays said that Alibaba scrapping its widely anticipated cloud initial public offering removes a near-term catalyst for unlocking value, disappointing investors. On the same day, BofA analyst Joyce Ju lowered the firm’s price target on Alibaba to $113 from $136 but kept a Buy rating on the shares. The firm said that the stock trades at an attractive valuation with the best exposure to benefit from potential China economy’s bottoming out.
Morgan Stanley downgraded Alibaba to Equal Weight from Overweight with a price target of $90, down from $110. The analyst listed a slower turnaround on CMR and cloud, the cloud spin-off withdrawal bringing uncertainty to the value-unlocking from reorganization, and the lack of a capital management catalyst without cloud distribution as negative developments weighing on the firm’s prior bullish thesis. BofA analyst Joyce Ju further lowered the firm’s price target on Alibaba to $106 from $113 and maintained a Buy rating on the shares. The firm estimates Alibaba fiscal Q3 total revenue of RMB261B, which would be up 5% year-over-year. Meanwhile, Barclays lowered the firm’s price target on Alibaba to $109 from $138 and kept an Overweight rating on the shares. Mizuho lowered the firm’s price target on Alibaba to $100 from $120 and kept a Buy rating on the shares. Jack Ma, co-founder of Alibaba, is reportedly buying up Alibaba shares, along with the company’s chairman, Joe Tsai, believing that the business is undervalued. The consensus Q3 earnings forecast stands at $2.69 per share.