Alibaba's Cloud Business Spinoff Cancelation Sparks Mixed Reactions From Analysts
Portfolio Pulse from Benzinga Neuro
Alibaba Group Holding Limited (OTC:BABAF) has canceled the spinoff of its cloud business, leading to mixed reactions from analysts and a significant drop in market value. Morgan Stanley removed Alibaba from its top pick and lowered the price target from $125 to $110. Bernstein reduced their price target from $100 to $93, while Barclays maintained a $138 price target, supporting the decision amidst regulatory uncertainties. JPMorgan kept a $150 price target but expressed concerns over the cloud business's growth. The cancellation follows U.S. chip curbs affecting Chinese companies, contributing to a $20 billion loss in Alibaba's market value.
November 20, 2023 | 10:43 am
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Alibaba's decision to cancel its cloud business spinoff has led to a sharp decline in its market value and mixed analyst ratings, with price target adjustments reflecting varying levels of concern and optimism.
The cancellation of the cloud business spinoff and the subsequent analyst reactions, including price target reductions by Morgan Stanley and Bernstein, indicate a negative short-term impact on Alibaba's stock. The significant market value loss further supports the likelihood of a negative short-term price direction. However, the maintained price targets by Barclays and JPMorgan suggest some level of underlying strength, which is why the confidence is not at 100.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100