The Chinese government is moving to take "golden shares" in the local units of Alibaba Group Holding Ltd and Tencent Holdings Ltd, as it formalises a greater role in overseeing China's most powerful tech companies, the Financial Times reported on Friday.
Shares of Alibaba (NYSE: BABA) rallied amid news at the start of the year that Jack Ma gave up control of Ant Group, a fintech serving as an affiliate company of Alibaba. Ma, who co-founded Alibaba, held on to his stake in Ant Group after resigning from Alibaba's board in October
China's Alibaba Group sold a 3.1% stake in Indian digital payments firm Paytm for a total of $125 million through a block deal on Thursday, a source with direct knowledge of the matter told Reuters.
Alibaba (BABA) closed at $115.02 in the latest trading session, marking a +0.12% move from the prior day. This change lagged the S&P 500's 1.29% gain on the day. At the same time, the Dow added 0.8%, and the tech-heavy Nasdaq gained 10.96%.
It's natural for investors to get intimidated by words like inflation, hard-landing recession, soft-landing recession, bear market, and war that are being thrown around. However, keeping an eye on stocks with solid fundamentals and strong support from Wall Street analysts makes investment decisions easier. TipRanks’ Analyst Top Stocks tool offers a
comprehensive view of the stocks that top Wall Street analysts are recommending right now. Planet Fitness (
NYSE:PLNT
) and Alibaba (
NYSE:BABA
) are two stocks that have recently been recommended by the best-performing Wall Street analysts.
Planet Fitness (PLNT)
Planet Fitness is one of the biggest and most rapidly-growing franchisors and operators of fitness centers in the U.S. The company is riding on growing memberships, robust digitalization, and a strengthening brand presence. It has recovered most of the losses incurred during the pandemic thanks to rising membership numbers.
In 2022, the company added 1.8 million members, bringing the total number to 17 million. It also opened 158 new stores. Planet Fitness now has 2,410 stores in total.
After suffering a decline in value for the better part of 2022, shares started a bull run around late September, returning
37.3% in the past three months. Piper Sandler analyst Peter Keith gave the stock a place in his top-five recession-safe stocks for 2023. The analyst anticipates the year to be marred by “murky” consumer spending behavior and thus chooses “both recession-resilient growth stocks with company-specific drivers as well as opportunistic, non-consensus stock ideas with either discounted valuation or idiosyncratic business drivers.”
What is the Price Target for PLNT Stock?
Keith, a PLNT bull, raised his price target to $93 from $79. Overall, Wall Street expects gains, as the
average Planet Fitness stock price target of $93.70 implies 11% upside potential. Moreover, the analyst consensus is bullish on the stock for the long term, as evidenced by 11 unanimous Buys.
Alibaba (BABA)
E-commerce and technology giant Alibaba had a tough year in 2022, battling various economic and regulatory uncertainties as well as the sharp pessimism around
Chinese stocks.
However, things have been looking better for the stock since October 2022. Shares have
increased by more than 50% in the past three months. Alibaba’s strong and loyal domestic customer base has helped the company overcome challenges, supporting its profitability even as the top line suffered. Notably,
BABA's earnings have been trending higher over the past several quarters.
Analysts on Wall Street have lately been staunchly bullish on BABA stock. Morgan Stanley (
NYSE:MS
) analyst Gary Yu, for instance, believes that the company’s share price will “rise in absolute terms over the next 60 days.”
Meanwhile, Citigroup (
NYSE:C
) analyst Alicia Yap, who maintained a Buy rating and raised the price target on the stock to $160 from $144, expects consumption in China to recover rapidly in 2023, which will be a boon for the company’s business. Other potential catalysts for Alibaba this year are a primary listing conversion to Hong Kong and a possible stock-connect approval (in which investors in Mainland China can access Hong Kong-listed shares and Hong Kong and international investors can access eligible shares listed in the exchange in Mainland China).
What is the Price Target for BABA Stock?
15 resounding Buys give Alibaba a Strong Buy consensus rating on Wall Street. Moreover, the average
BABA stock price target of $137.36 indicates 19.45% upside potential over the next year.
The Takeaway
2023 is not likely to be an easy year for stocks. However, Planet Fitness, with its focused growth strategy, and Alibaba, having practically all of China as its customer base, can be great bets to stay ahead of the market, according to analysts.
Disclosure
Alibaba stock (NYSE:BABA) has witnessed a big rally over the past two months, rising by close to 60% since early November. There are a couple of factors driving gains for the Internet giant. Firstly, China has been scaling back on its stringent zero Covid-19 policy and the big re
Investors in Alibaba Group Holding Ltd (Symbol: BABA) saw new options become available today, for the June 2025 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 892 days until expiration the newly ava
The NASDAQ 100 Pre-Market Indicator is down -66.83 to 11,041.62. The total Pre-Market volume is currently 47,599,160 shares traded.The following are the most active stocks for the pre-market session: Prenetics Global Limited (PRE) is +1.48 at $3.34, with 8,500,987 shares traded.
Chinese e-commerce giant Alibaba Group Holding Ltd has signed a cooperation agreement with the government of Hangzhou, the city where the company is headquartered, local media reported on Tuesday.
Chinese e-commerce giant Alibaba Group Holding Ltd has signed a strategic agreement with the government of Hangzhou, the city where the company is based, local media reported on Tuesday.
China eased back on its harsh COVID restrictions, the lockdowns and the travel quarantines, and that nation’s stock markets jumped, rising some 40% from their recent low points. The bullish sentiment in the world’s largest country – and second largest economy – was infectious, and the MSCI Asia Pacific Index is up some 20% from its October low. In fact, the Asian benchmark has outperformed the S&P 500 in the first week of 2023.
What this means, at the bottom line, is that
Chinese stocks are looking better and better to investors. In the words of Hou Wey Fook, chief investment officer from Singapore’s DBS, “the risk-reward for China’s stocks looks enticingly attractive at this stage.”
Getting into greater detail, Hou further explains, “[We] are convinced that the market bottom of October 2022 is in place… On catalysts, we are now seeing a full-fledged reopening of the economy, as well as the government's proactive support measures for its property sector.”
So let’s go take a look at two major Chinese stocks. These are definitely companies you’ve heard of – they’ve both had plenty of headlines in recent years. According to the TipRanks data, both are Buy-rated, with double-digit upside potential for the coming year. Let’s dip into the details, along with recent comments from the Street’s analysts.
Nio, Inc.
(
NIO)
We’ll start in China’s electric vehicle sector, and look at one of the leading companies, Nio. Nio has the advantage of having been an ‘early adopter’ in the sector, and has been delivering production-line vehicles since 2018. The company currently has a lineup of 6 EVs available in China’s consumer market, in SUV, sedan, and coupe designs. Nio hasn’t put all of its eggs in the vehicle basket, however; the firm also introduced Battery-as-a-Service to the Chinese electric vehicle market, giving customers and drivers a faster, less expensive mode for swapping out battery packs when the car needs recharging.
Nio has had some conflicting data releases recently, starting with a solid 3Q22 earnings release in November – and then a disappointing delivery update for December.
On earnings, the company showed revenues of $1.83 billion in Q3, for a 24% quarter-over-quarter gain, and a larger 38% year-over-year gain. The company delivered 31,607 vehicles in the third quarter, for a 29% y/y increase.
More recently, however, the delivery numbers have stumbled. In the last delivery update, reported on January 1, Nio showed a total of 15,815 December deliveries, capping a Q4 total of 40,052. While these numbers kept up the company’s positive trend – the December deliveries were up more than 50% y/y, and the Q4 deliveries up more than 60% – they both missed the forecasts, which had called for 20,000 deliveries in December, and between 43,000 and 48,000 for the quarter.
The miss in deliveries can be chalked up to a series of headwinds that piled up as 2022 ended, and which can be summed up as ‘supply chain difficulties.’ Nio has had issues with its supply of metal casting parts and silicon carbide, and with setting up its EDS assembly – and even with delivery logistics on completed vehicles. Nevertheless, the company did record a 34% y/y delivery increase for all of 2022, with 122,486 vehicles delivered. As of December 31, 2022, the company has delivered a cumulative total of 289,556 EVs.
Analyst Edison Yu, in his coverage of NIO shares for Deutsche Bank, notes the problems that Nio has had, but goes on to say, “We anticipate all outstanding operational bottlenecks will be addressed by the end of the first quarter. NIO has already qualified additional casting suppliers, eliminating capacity constraints for the ET7. An additional EDS assembly line has been added, supporting ET5 volumes and the silicon carbide supply issue related to Onsemi should be resolved this month.”
Looking ahead toward Nio’s meeting its challenges, Yu rates the shares as a Buy – and his $21 price target implies a one-year upside gain of 95%. (To watch Yu’s track record,
click here
)
Overall, this Chinese EV maker has gotten reviews from 13 Wall Street analysts – and their views include 9 Buys and 4 Holds for a Moderate Buy consensus rating. The stock is selling for $10.76 and its $16.14 average price target suggests a gain of 50% over the next 12 months. (
See NIO stock forecast on TipRanks)
Alibaba Holdings
(
BABA)
Now let’s switch to China’s e-commerce sector, and Alibaba. While this company focuses mainly on Chinese online retail, where overall online penetration rates are lower than in the West, China’s larger population means that Alibaba can rely on a domestic customer base close to 800 million strong, more than all of Europe.
Alibaba’s strong domestic customer base, and its ability to delivery virtually any product to any buyer in China, gives the company a solid foundation to stand on – and as a result,
earnings have been rising for several quarters now. The company reported a top line of US$29.12 billion in the last reported quarter (fiscal 2Q23, corresponding to calendar 3Q22), for a modest 3% y/y gain. Income from operations, at US$3.5 billion, showed a far stronger jump, of 68% y/y, and the non-GAAP diluted EPS of US$1.82 per American Depositary Share was up 15% from the year-ago period, and 7% above the forecast $1.70.
All in all, investors were happy with what they saw and BABA shares have gained approximately 40% since the earnings release.
Morgan Stanley’s Gary Yu takes an aggressively bullish stance on Alibaba, stating flatly, “We believe the share price will rise in absolute terms over the next 60 days.”
Putting some meat on those bones, Yu adds, “We see 1) an inflection in customer management revenue (CMR) on the back of consumption recovery in China, and 2) reacceleration in cloud revenue driven by non-internet industries, fueling high-quality earnings growth…. We also believe BABA will outperform other China Internet stocks during the current easing regulatory environment…. We view BABA as a key beneficiary of China's reopening and a proxy for inflows to China from global investors.”
These are strong opinions, and they back up Yu’s Buy rating on BABA shares, while his $150 price target points toward a 35% gain by the end of 2023. (To watch Yu’s track record,
click here
)
The Morgan Stanley view is highly bullish here – but the 14 other analyst reviews on BABA are also bullish, for a unanimously positive Strong Buy consensus rating. With a current trading price of $110.83 and an average price target of $138.67, Alibaba’s stock claims a 25% upside potential on the one-year time horizon. (
See Alibaba stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’
Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer
: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The Nasdaq rose more than 2% on Monday with Big Tech and growth stocks spearheading gains as recent signs of a cooling labor market supported bets of a slower pace of interest rate hikes by the Federal Reserve.
The tech-heavy Nasdaq led gains among the main Wall Street indexes on Monday, boosted by shares of Amazon and Tesla, while signs of a cooling labor market supported bets of a slower pace of interest rate hikes by the Federal Reserve.
Alibaba (BABA) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Wall Street's main indexes were set to open higher on Monday on optimism around China reopening its borders, while signs of a cooling labor market boosted bets of a slower pace of interest rate hikes by the Federal Reserve.
The NASDAQ 100 Pre-Market Indicator is up 72.87 to 11,113.22. The total Pre-Market volume is currently 61,028,475 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +0.31 at $17.95, with 4,179,062 shares traded. Th
U.S. stock index futures edged higher on Monday on optimism around China reopening its borders, while signs of cooling in the labor market boosted bets of a slower pace of rate hikes by the U.S. Federal Reserve.
(RTTNews) - Shares of e-commerce giant Alibaba Group gained in Hong Kong trading as well as in pre-market activity on the NYSE following the announcement that Jack Ma, its co-founder, and executive chairman, is giving up control of its sister concern Ant Group Co., Ltd.