BABA: Jefferies Cuts Price Target Ahead of Earnings — While $433M Questions Remain for Investors
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Court: S.D. New York
Case: 1:20-cv-09568
⚡ Key Points:
- Jefferies keeps Buy rating but lowers PT to $150
- June quarter revenue expected to grow 4% YoY
- $433.5M investor settlement still active
As Alibaba gears up to report earnings, analysts see strong AI-driven cloud growth — but short-term caution too.
📉 PT Cut Despite Strong AI Momentum
- Jefferies maintained a Buy rating on Alibaba but trimmed its price target from $153 to $150.
- The firm expects 4% YoY revenue growth in the June quarter, to RMB 252B, slightly below consensus.
- Analysts anticipate solid performance in Cloud Intelligence with 23% YoY growth, driven by AI demand.
- Core commerce (Taobao Tmall Group) is expected to see 10.5% YoY CMR growth, outpacing GMV.
- However, EBITA may fall due to heavier investment in instant commerce like Eleme and Fliggy integration.
🧠 Cloud Gains, Narrowing Losses Abroad
- AIDC (Alibaba International Digital Commerce) is estimated to lose RMB2.1B this quarter — better than previous expectations.
- Jefferies believes the market has largely priced in Alibaba’s investment-heavy strategy for fast delivery and e-commerce expansion.
- With the next earnings call approaching, investor focus is shifting to margin impact and capital efficiency.
⚖️ Meanwhile: $433.5M Still on the Table
- At the same time, Alibaba has agreed to a $433.5M settlement with
BABA investors over claims it misled them about Ant Group’s regulatory risks. - The abrupt halt of Ant’s IPO and subsequent antitrust scrutiny triggered over 20% in stock losses within two days in late 2020.
- Shareholders argue Alibaba failed to disclose serious compliance challenges tied to Ant’s lending business.
- If you held BABA shares between late 2020 and early 2021, you may still be eligible to file a claim for payout.
🔍 Final Take
- While analysts remain bullish long term, short-term PT cuts and tight margins may keep investors cautious.
- And for those still holding from the Ant Group fallout, there's more than just earnings on the radar.
You can check more information about the BABA settlement and file for payment HERE.