JPMorgan analyst Alex Yao double downgraded Alibaba Group Holding Ltd(NYSE:BABA) to Underweight from Overweight with a price target of $65, down from $180 (21% downside).
Due to rising geopolitical and macro risks, many global investors fled the China internet sector, leading to significant fund outflows. The trend was likely to continue it being the most owned stock. The pressurized core business also jeopardized its near to mid-term business outlook, with rising inflation and "weakening consumption confidence thanks to China's COVID resurgence.
JPMorgan believed China's sector-wide selloff might continue without valuation support in the near term as risk management becomes the most crucial consideration among global investors about their China investment strategy.
"Alibaba is not only the sentiment barometer of China Internet but also a proxy to China online consumption." Analysts see the China Internet names as "uninvestable" on a six-to-12-month view with a binary share price outlook.
Other stocks downgraded included JD.com Inc (NASDAQ:JD), Baozun Inc (NASDAQ:BZUN), Dada Nexus Ltd (NASDAQ:DADA), Baidu Inc (NASDAQ:BIDU), Bilibili Inc (NASDAQ:BILI), Kingsoft Cloud Holdings Ltd (NASDAQ:KC), Tencent Music Enter Group (NYSE:TME), NetEase Inc (NASDAQ:NTES), HUYA Inc (NYSE:HUYA), DouYu International Holdings Ltd (NASDAQ:DOYU), Zhihu Inc (NYSE:ZH), JOYY Inc (NASDAQ:YY), Trip.com Group Ltd (NASDAQ:TCOM), OneConnect Financial Technology Co Ltd (NYSE:OCFT), Hello Group Inc (NASDAQ:MOMO), iQIYI Inc (NASDAQ:IQ), Kimball Electronics Inc (NASDAQ:KE), Pinduoduo Inc (NASDAQ:PDD).
Price Action: BABA shares traded lower by 10.20% at $77.84 on the last check Monday.
