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What to Make of Alibaba Stock’s Wild 5 Days of Trading

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Alibaba
‘s stock has been whipsawed recently, with experiencing large daily moves recently only to go nowhere. But Susquehanna analyst Shyam Patil stuck to his “positive” view on the stock Wednesday.

The China-based e-commerce giant’s American depositary receipts have been volatile in the past five days, moving up 2.2% on Tuesday following a 2.1% loss Monday, a 3% loss on Friday, a 6.6% rise on Thursday, and a 3.4% loss the previous Wednesday. Despite the volatile daily moves, the stock has dipped just 0.04% over the five trading days.

What’s behind the whipsaw trading? Blame it on news about China, the world’s second-largest economy. The country is moving away from its strict zero-Covid strategy, a positive for the stock, but there has also been disappointing trade data, showing the worst import slumps since mid-2020.

Investors, however, should focus on what Alibaba (ticker: BABA) can control, and worry less about what it can’t, notes Patil, who pushed out a report reiterating his positive view of the stock, while maintaining his $185 target for the price, more than double current trading levels.

“Alibaba continues facing pressures but [it’s] focusing on efficiencies,” he said in his note on Wednesday. The pressures include the impacts of the pandemic, a weaker global economy, he said.

Those efficiencies include executing on cost controls and improving its operations, as evidenced by the second-quarter earnings beat. Alibaba, on Nov. 17, reported a profit of $1.81 a share, higher than the $1.69 expected by analysts tracked by FactSet.

Though the stock might continue moving based on the China news, Alibaba’s execution might matter more for the long term.

Write to Karishma Vanjani at karishma.vanjani@dowjones.com

Credit: marketwatch.com

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