Alibaba's Near-Term Outlook May Be Dampened By Recent Policy, Business Updates

In a report rolled out Tuesday, Oppenheimer analysts Ella Ji and Fiona Zhang take a look into Alibaba Group Holding Ltd (NYSE: BABA). They reiterated an Outperform rating, but trimmed their price target from $112 to $105.

The firm remains bullish on the company's long-term growth potential, but adjusts down its estimates based on recent business updates. Shares of Alibaba traded recently at $82.72, down 0.62 percent.

"Following the SAIC report, Alibaba has stepped up measures in cracking down counterfeit products and strengthening controls, signaling some NT adjustments in GMV growth. The continued strong demand for long-tail keywords, the ongoing mix shift to mobile, and the suspension of online lottery sales [in which Taobao holds nearly 20 percent market share] will also likely hurt blended take rate in the coming qtrs," the report explained.

Related Link: Alibaba's Film Subsidiary Is Losing A Lot Of Money

The analysts stay confident over the long-term, however, as they believe stricter control should make Alibaba "more immune to potential risks (product quality and regulation-related) and ensure healthier growth."

On this updated view, the analysts decreased their fiscal 2015 and fiscal 2016 GMV and revenue estimates by 1 percent and 2 percent, respectively. They also reduced adjusted EPS estimates by 1 percent and 4 percent, to $2.19 (2015) and $2.74 (2016).