Alibaba (BABA) shares are picking up pace as of Friday, maintaining an 8.5% gain. So far, BABA shares are up 0.4% to $88.36. JPMorgan contributed to this by raising the target price from $75 to $130, thereby providing the giant marketplace with an increased rating.
Alibaba is the largest Chinese company headquartered in Hangzhou, operating in the field of Internet commerce, the owner of the B2B portal Alibaba.com.
It trades both under the B2B scheme and carries out online retail trade around the world. The owner of his own electronic payment system Alipay.
The target price of $130 allows for up to 50% growth. At the same time as Alibaba, JPMorgan also upgraded other Chinese companies such as Pinduoduo (PDD) and JD.com (JD).
Although 2 months ago the JPMorgan team said that “Chinese stocks are unsuitable for investment”
Analysts note that due to the intentions regulators to review this year’s audits of large-cap companies, industry uncertainty should ease.
In addition to JPMorgan, they raised their target price for BABA and Deutsche Bank to $172, and HSBC to $156, and Citigroup to $177.
However, to date, China’s economic data suggests that if the lockdown is not eased, the country could step into a recession.
Industrial production fell 2.9% and retail sales plunged 11.1% in April, doubling the forecast. Significantly reduced and the service sector , construction and manufacturing industries .
In addition, as the company stated, in Russia, Alibaba has reduced about 40% of the employees of its joint venture.
The outlook for BABA shares is not yet very optimistic, despite the increase in the target price. It is quite possible that the level will reach the price of up to $130 per year, but before that it may fall along with the American market. Worrying sentiment prevails in the US markets, with China forecast for a recession, so BABA appears to have made a new range low on May 12, which is lower than the previous range low on April 25.
Alibaba currently has a market capitalization of $236 billion.
Operating profit margin – 11%
Profitability – 8%
52 week high – $230.89
52-week low – $73.28
Wall Street Average Rating – Buy
Target price – $173.87
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