What a Trump Presidency Could Mean for Alibaba
Alibaba shares fell in Wednesday’s regular trading session, after it was announced that Trump won the U.S. presidency.
Alibaba Group Holding Ltd. (NYSE: BABA) shares fell in Wednesday’s regular trading session. Shares are facing increased pressure after it was announced that Trump won the U.S. presidency.
Essentially this company could be affected by increased trade barriers between the United States and China. Trump made one of the key platforms of his campaign that he was a “free trader” and that he didn’t agree with the currency manipulation that took place overseas in China.
What Wedbush Equity research believes is that a result of the Trump presidency could be increased taxes on goods from China. These higher tariffs on Chinese goods could have an impact on Aliexpress sales, and conversely higher tariffs on U.S. goods could hurt Tmall Global sales in China.
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The firm further believes that should the Chinese economy be hurt by trade sanctions from the United States, a weakening Chinese consumer could also pressure Alibaba’s results. Wedbush has a Neutral rating with a $90 price target.
The company isn’t set to report its fiscal third-quarter results until January, but the consensus estimates from Thomson Reuters are calling for per-share earnings of $1.14 and $7.39 billion in revenue. In the same period of last year, it had $6.43 per share in earnings and $35.54 billion in revenue.
Excluding Wednesday’s move, Alibaba has outperformed the broad markets, with the stock up 22% year to date. Over the past 52 weeks, the number is identical.
Shares of Alibaba were trading down 3% at $96.82 on Wednesday, with a consensus analyst price target of $119.75 and a 52-week trading range of $59.25 to $109.87.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
