Alibaba Slump Has Even Its Biggest Bear Seeing 30% Upside

(Bloomberg) -- The price target reductions are piling up for Alibaba, but even its biggest bear still sees a 30% upside.

Han Joon Kim, an analyst at Deutsche Bank AG, cut Alibaba’s target price to $189 from $196 amid concerns the firm’s gross merchandise value for the quarter ending in September could be softer than during the previous three months. The target price, the lowest among about 50 analysts covering the stock, implies a 29 percent upside from Alibaba’s Tuesday close.

The company rallied 210 percent from its 2014 initial public offering through June 14, and is down 30 percent since then as a worsening trade spat between the U.S. and China boosted concern about the firm’s profit growth.

Over the past two days, several analysts have cut their price targets. KeyBanc’s Hans Chung cut his to $215 from $220 and Raymond James’ Aaron Kessler lowered his estimate by $20 to $260. Morgan Stanley’s Grace Chen cut the target price by $20 to $220 . Karen Chan, an analyst at Jefferies, cut it to $208 from $225.

Alibaba has 49 buy, one hold and zero sell ratings. The average price target of 46 analysts, at $228, implies a 55 percent rally from Tuesday’s close.

To contact the reporter on this story: Elena Popina in New York at epopina@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Christiana Sciaudone

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