Why Citibank, HSBC analysts raised Alibaba price targets
Analysts see a 26% upside on Alibaba Group’s stock, following better-than-expected December 2020 earnings and an oversubscribed US bond sale.
- Alibaba Group’s (HKG: 9988) shares are down over 2% this week
- Last week, share price jumped up 6% after the group posted better-than-predicted quarterly sales
- In terms of outlook, its US stock (NYSE: BABA) has an average 12-month price target of US$323, equating to an upside of over 26%
- Trade Alibaba, long or short, with an IG account today
Alibaba share price: What’s the latest?
Alibaba Group Holding’s share price is down over 2.2% this week.
Last week, shares rallied over 6% after the company posted better-than-predicted quarterly revenue and announced the pricing of US$5 billion worth of US dollar bonds.
Stocks fell 0.3% on Tuesday (09 February 2021), closing at HK$255.40 a share.
In terms of price targets and consensus ratings, BABA currently has an average 12-month target of US$323 (representing an upside of over 26%) and rating of ‘buy’, according to the latest data published by MarketBeat.
On 03 February 2021 - a day after the company posted its earnings, Citigroup analysts raised their price estimate to US$345 from US$316 on a ‘buy’ call; Mizuho increased target to US$285 from US$270 also with a ‘buy’ rating; while HSBC also boosted their ‘buy’ recommendation on a higher prediction of US$330.
US bond sale attracted US$38 billion worth of orders
The e-commerce conglomerate officially proposed to offer US dollar-denominated senior unsecured notes, including notes being issued under its sustainable finance framework, in an underwritten public offering registered with the United States Securities and Exchange Commission on Wednesday (03 February).
Following that, the group then priced the notes at the following rates:
● US$1,500,000,000 2.125% notes due 2031 at an issue price per note of 99.839%
● US$1,000,000,000 2.700% notes due 2041 at an issue price per note of 99.265%
● US$1,500,000,000 3.150% notes due 2051 at an issue price per note of 99.981%
● US$1,000,000,000 3.250% notes due 2061 at an issue price per note of 99.978%
The offering, which is expected to close on 09 February 2021, has reportedly attracted US$38 billion worth of orders from a large number of top fixed-income investors.
Alibaba says it intends to use the net proceeds of the sale of the non-sustainability notes for general corporate purposes, including working capital needs, repayment of offshore debt and potential acquisitions of or investments in complementary businesses.
Alibaba Cloud posts positive EBIT for first time
The internet company also reported its December 2020 quarter earnings last Tuesday (02 February).
Revenue increased 37% year-on-year to 221.084 billion yuan (US$33.883 billion), beating analyst estimates.
Annual active consumers on its China retail marketplaces reached 779 million for the twelve months period ended 31 December 2020, an increase of 22 million from the twelve months period ended 30 September 2020.
Mobile monthly active users for China retail marketplaces, meanwhile, came in at 902 million in December 2020, an increase of 21 million over September 2020.
The company also reported an adjusted EBITA (earnings before interest, taxes, and amortization) - a measure of profitability - of 24 million yuan (US$3 million) for its cloud business in the December quarter. This is compared to a loss of 356 million yuan in the same period in 2019.
Alibaba said this is the first quarter that the cloud computing arm has achieved positive adjusted EBITA.
How to trade Alibaba shares with IG
Are you feeling bullish or bearish on Alibaba’s stocks?
Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.