Alibaba Shares Near Record Discount To Analysts’ Estimates

Alibaba Shares Near Record Discount To Analysts’ Estimates
Andrew Rummer

over 2 years ago1 min

Alibaba’s woes have pushed its shares down 38% this year, leaving them trading near a record discount to analysts’ price targets.

As the chart shows, analysts at investment banks have cut their projections for Alibaba by 23% since the start of the year as Chinese authorities cracked down on the nation’s biggest tech firms. The retailer’s shares have plummeted even faster than those freefalling projections, however, leaving them trading near the lowest price ever compared to estimates. 

Alibaba has had a tough 12 months as Chinese regulators blocked it from floating sister company Ant Group on the stock market, slapped it with a $2.8 billion antitrust fine, and hit tech firms with a series of fresh regulations. 

A large discount to analyst projections is no guarantee a stock will climb. After all, analysts tend to move their estimates up or down to reflect the latest stock price – often lagging the market by several weeks. 

But such a large discount suggests that Wall Street believes there’s at least some potential for Alibaba to bounce back. And a massive 55 of 60 analysts tracking the company rate it a “buy” and just one label it a “sell”, according to Bloomberg data.

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