Sat. Oct 1st, 2022



© Reuters. Coupang (CPNG) Market Share to Reach 26% in 2023, Says Analyst

By Sam Boughedda

South Korean e-commerce company Coupang (NYSE:) was upgraded to Outperform from Neutral at Credit Suisse by analyst Soyun Shin on Friday.

Coupang shares jumped 15% Friday, following the upgrade.

Shin lowered the firm’s price target on the stock from $28 to $19 per share. The analyst explained that Coupang shares have underperformed the S&P index by 58% in the past year over market concern about the sustainability of online traffic growth and uncertainties of the macro environment.

However, they “believe rising feasibility based on bottom-line turnaround through the lock-in effect of Rocket WOW subscription (the largest paid membership programme) and monetization initiatives are underestimated by the market.”

Explaining Credit Suisse’s investment thesis, Shin said the company “should start to harvest its traffic by leveraging the largest membership subscribers, accumulated user data which can be utilized to generate ad sales and competitiveness in providing fulfillment service for 3P merchants.”

“While online shopping transaction growth is normalized amid the re-opening, which led us to cut our GMV estimates by 6.5-10.4% for 2022-23E, market share gain momentum should be sustainable mainly due to the cohort expansion of core subscribers. We estimate Coupang’s market share to reach 26% in 2023E, from 16% in 2020 (goods only),” said Shin.

On Thursday, Morgan Stanley analysts said Coupang’s “dominant position, with its fulfillment and logistics infrastructure, makes it a unique asset.”

By Rahul

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