Chinese e-commerce giant Alibaba is reportedly selling department store chain Intime as it shifts away from brick-and-mortar businesses. According to insiders, Alibaba intends to sell Intime to Chinese apparel firm Youngor Fashion for an undisclosed sum. It bears mentioning that Alibaba purchased Intime for roughly $2.6 billion in 2017.
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Insider reports claim that Alibaba and Youngor Fashion will announce the deal sometime this week. Interestingly, South China Morning Post, which is owned by Alibaba, broke this story. Investors might take this as a sign of credibility concerning the report.
What This Means for BABA Stock
Alibaba is ditching Intime as part of an ongoing effort to strengthen its core businesses. That includes its e-commerce division and cloud computing department. This comes as the Chinese tech company focuses on expanding its influence in the artificial intelligence (AI) sector.
On top of this, Alibaba joins the list of companies concerned by recent economic data in China. Reports showed a 3% increase in retail sales, which was below estimates. Brick-and-mortar and e-commerce companies are feeling the effects of this with reduced consumer purchases. With that in mind, it will be interesting to see if Alibaba sells Intime for more than it paid for it.
Today’s news has BABA stock down 1.69% as of this writing. Even so, the stock is up 14.51% year-to-date and 21.78% over the last 12 months.
Is BABA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Alibaba is Strong Buy based on 14 Buy and one Hold ratings over the last three months. With that comes an average price target of $127.05, a high of $146, and a low of $105. This represents a potential 47.15% upside for BABA shares.
