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Coupang Shares Added to Goldman Sachs' Conviction Buy List, Analyst Sees 100%+ Upside

Published Apr 08, 2022 08:20AM ET Updated Apr 08, 2022 08:51AM ET
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© Reuters. Coupang (CPNG) Shares Added to Goldman Sachs' Conviction Buy List, Analyst Sees 100%+ Upside
 
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Goldman Sachs analyst Eric Cha added Coupang (NYSE:CPNG) shares to the firm's Conviction Buy list as he sees a clearer path to profitability.

The analyst says headwinds (rates, industry growth deceleration, COVID, etc.) are now priced in with shares trading nearly 40% lower YTD.

On the other hand, investors are underestimating the company's operating leverage potential.

Thanks to improved disclosure from the company from 4Q21 earnings, we were able to make numerical arguments for the two debates that seem to be topical for CPNG among the investors, which are 1) feasibility around 30%+ top line growth and 2) feasibility and drivers for ˜less than $400mn adj. EBITDA loss, Cha said in a client note.

The analyst is especially positive about larger improvement in adjusted EBITDA when compared to the Street consensus. This could yield a positive surprise and help improve the overall sentiment on the stock due to improved LT profitability outlook as well as lessen concerns on the burn rate and cash supply for the company.

A new price target is $37.00 per share, signaling an upside of 108% compared to yesterday's closing price.

Coupang stock price is up 2.5% in pre-market Friday.

By Senad Karaahmetovic

Coupang Shares Added to Goldman Sachs' Conviction Buy List, Analyst Sees 100%+ Upside
 

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