What’s next for Alibaba shares amid current volatility?

• Alibaba Group Holding Ltd (HKG: 9988) share price closed 8% lower on Monday (13 June)
• BABA, the e-commerce group’s US counter, is down by 8% since Wednesday
• Last week, the stock rose then fell following since-refuted reports that Ant Group’s IPO was being revisited
• While most analysts are still bullish on BABA, DZ Bank analyst Manuel Muehl lowered his price target on BABA by another 15% following its latest quarterly earnings
• Keen to trade Alibaba shares? Open an account with us to long or short the stock

Alibaba stock price: what’s the latest?

Alibaba shares kickstarted the week with another steep decline, with the group’s Hong Kong listing falling as much 8% on Monday.

The Chinese e-commerce group’s Hong Kong share price first soared 13% last Wednesday, after US-listed Chinese stocks rose on hopes that regulatory crackdowns were coming to an end. However, the counter erased over half of those gains the following day as investor excitement calmed down.

Then, reports of the Chinese government being in talks with Ant Group to revive its initial public offering late Thursday saw Alibaba’s Hong Kong shares spike up another 6.5% on Friday morning, only for it to be quickly corrected after both Ant and authorities denied any such discussions.

Alibaba’s Hong Kong and US listings are up by 23.9% and 24.8% in the last one month.

How do analysts see BABA performing in the next 12 months?

In terms of outlook, BABA shares have a consensus rating of ‘buy’ from 22 out of 26 analysts polled and an average price target of US$188.49 (equating to a 71.6% upside from its last traded price of US$109.86), based on the latest MarketBeat data.

The latest investment thesis came from brokerage firm Robert W. Baird, who reiterated an ‘outperform’ rating on the stock on 23 May 2022, while lowering price target to US$144 from US$160.

However, DZ Bank analyst Manuel Muehl has lowered his price target of Alibaba’s American depositary shares by 15% to US$85 alongside a ‘sell’ call.

Muehl, whose predictions have outperformed 67 other analysts polled by Bloomberg, is the only analyst to have a ‘sell’ rating on BABA.

‘We found the earnings season for the entire sector to be pretty lacklustre,’ Muehl told The South China Morning Post in an interview following Alibaba’s March-quarter earnings.

‘Margins have come down across the board, and revenue growth has been slowing substantially.’

Last month, the online shopping platform saw revenue come in higher than analysts’ average estimates (based on Refinitiv data), rising 9% year-on-year to 204.05 billion yuan (US$30.35 billion), as against analyst estimates of 199.3 billion yuan (US$29.6 billion).

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