LB Takeaway | Netflix price target cut by 40%, Google and Meta also lowered

Morgan Stanley: maintain "overweight" rating of Alibaba, price target $140

Calculated at yesterday's closing price of $119.12, this price means that there is still room for 18% to rise!

Reason: The bank expects that Ali's customer management revenue (CMR) fell 11% year over year in the first fiscal quarter, but will be offset by lower losses on Taobao Special Edition and Taocai Cuisine. It is expected that China's e-commerce EBITDA will fall 19.8% year over year to 40.8 billion yuan. In addition, cloud business revenue is expected to grow 8% year over year; local service revenue will increase 1% year over year, and EBITDA will be 4.5 billion yuan; international food service revenue will be flat year-on-year, and adjusted EBITDA will be maintained at 2.6 billion yuan.

The report also pointed out that although the visibility of Ali's recovery process is still low, the market demand is gradually recovering, coupled with the cost optimization of the group, it continues to be optimistic that adjusted EBITDA will grow steadily in fiscal year 2023 and thereafter, and emphasized that Ali's current price is equivalent to 13 times the expected price-to-earnings ratio in 2024, which is considered attractive.

Barclays: Maintain Netflix's "wait-and-see" rating, slash its price target by 38% from $275 to $170

Calculated at yesterday's closing price of $184.06, this price means that there is 8% room for decline!

Reason: Netflix's "growth is likely to be weak despite a strong performance in content" in the second quarter, the bank said, and it also looks set to lose 2.8 million net subscribers in the second quarter, which is higher than the 2 million the company expected.

Analysts pointed out that Netflix's US subscriber numbers may have fallen in a row based on credit card data in April and May, and the bank also lowered its earnings forecast for the company. Analysts believe that even the revised earnings forecast may be at risk given the investment required to build an advertising and gaming business.

JPMorgan: Reaffirming Ctrip's "Neutral" rating, raising its price target by 17% to $27 from $23

Calculated at yesterday's closing price of $24.90, this price means that there is still room for 8% to rise!

Reason: The bank pointed out that its stock price has risen by 30% in the past month, outperforming the indexed performance of technology stocks in the same period, which is believed to be due to the healthy recovery of domestic tourism since the beginning of June.

However, due to the current epidemic, the tourism industry has no prospect in the second half of the year, and the number of outbound flights has decreased. Considering that the outbound business will contribute greatly to Ctrip, it is expected that the pace of market recovery will affect the stock price performance in the next 6 to 12 months. The market estimates that the outbound travel volume will return to 30% of the level in the same period in 2019 next year, but the bank predicts that it will only recover to 20%, pointing out that the recovery of outbound tourism largely depends on the supply of flights, which has not improved yet.

Guggenheim: Cut Alphabet's price target by 10 % to $2700 from $3000

Calculated at yesterday's closing price of $2,291.44, this price means that there is still 17.8% room for improvement!

Reason: Alphabet's price-to-earnings ratio is now 15 per cent lower than Microsoft's, the bank notes. Given YouTube's diverse inventory and broad advertiser base, the bank expects the tech giant to be a resilient player in advertising, but YouTube's ad revenue growth should be "significantly slower" than in the past.

Guggenheim: Reduces Meta's price target by 18% from $250 to $205

Calculated at yesterday's closing price of $169.77, this price means that there is still 21% room for improvement!

Reason: The bank cited a low price-to-earnings ratio on the Nasdaq 100. "We believe investors will discuss increased usage, advertiser and regulatory headwinds, as well as the company's unique consumer size, leading ad platform and financial and technical resource strengths," the analysts wrote.

The bank believes its shares are "attractively priced" for now. But looking at the digital advertising industry as a whole, macro-related headwinds are likely in the second half of the year, leading to lower digital ad spending, meaning total spending growth in 2022 will lag behind that in 2021. TikTok is also expected to continue to make up a large chunk of the overall digital ad portfolio, "especially from the bottom of the ad budget", the bank noted.

UBS: Give Samsonite "Buy" rating, target price of HK $24.7

Calculated at today's closing price of HK $16.7, this price means that there is still room for 48% to rise!

Reason: The bank expects that the company's net sales this year and next year may reach 82%/ 110 % before the epidemic, and its forecast for next year is higher than market expectations, and the gross margin pressure is limited. It also believes that the company will outperform the market due to the continuous improvement in global travel demand.

According to the report, despite rising travel costs, market interest in travel continued to improve in May this year, with the bank estimating that global luggage sales will grow by 29% to 35% year over year this year and next, mainly due to a solid recovery in travel demand, or potentially driving companies to regain market share growth.

Bank of America Securities: Reiterates HSBC Holdings' "Buy" rating with a target price of HK $70

If calculated at today's closing price of HK $49.65, this price means that there is still 41% room for improvement!

Reason: Bank of America estimates that deposit spreads are recovering, with a significant positive impact, allowing the company to reverse the constraints of the zero interest rate environment of the past 15 years and return to its basic business model. The bank raised its provision forecast for this year by 20%, but emphasized that a $1.4 billion increase in total impairment over the next three years is one-tenth of the expected increase in annual net interest income.