Hit by Lockup Sentiment, GOTO Price Far Below Analyst Consensus

Photo: Doc. GoTo

JAKARTA - Shares of PT Goto Gojek Tokopedia Tbk (GOTO) which experienced selling pressure after the end of the lockdown period on November 30, 2022, are considered by a number of market players to provide opportunities for investors to get bigger profits in the future. The movement of abnormal stock prices is the best opportunity for accumulation.

Director of Equator Swarna Capital Hans Kwee assessed that GoTo shares have reddened in recent days amid the issue of period lockdowns that are more driven by sales of retail investors. Old investors who buy at the time of the IPO usually understand business risks and have long investment horizons.

"So, selling technology stocks at a time when interest starts to rise and tends to be high is not appropriate. The current price is not optimal for investors because of economic sentiment issues. Investors who have been investing in GoTo for a long time must be more patient waiting for optimal stock prices," Hans said, in a written statement, Monday, December 5.

Although GOTO's share price touched ARB, a number of investors continued to make purchases. RTI data noted that foreign investor JP Morgan's favorite brokers actively held GOTO shares of up to 500 million shares in yesterday's trading.

The accumulation was also shown by Mirae Sekuritas brokers and other securities. In yesterday's trading, foreign investors carried out buying and selling actions of up to IDR 1.8 trillion. The rest, in a smaller volume, is carried out by domestic investors.

Hans also said new investors who buy, must conduct careful evaluations including future business potential so that seeing the current price decline could be a momentum for accumulation.

"Because the price drop will make fundamental stocks look more attractive," said Hans.

Meanwhile, MNC Sekuritas analyst Andrew Susilo advised investors to look at GOTO shares technically, especially if they have entered the oversold phase.

"It is impossible for the price to move in one direction, there must be a turning point. This is actually a good opportunity. As long as customers take Gojek, order GoFood, shop at Tokopedia and pay using Gopay, there is no need to worry too much," he said.

Bloomberg's consensus to date shows that 11 out of 20 analysts have an average share price target of 12 months in IDR 292.88 per share. This price is 125 percent higher than the price at the close of Friday afternoon of IDR 132 per share on February 12, 2022.

With the current situation, 11 analysts recommend buying GOTO shares. While 4 analysts advise holders and 5 analysts in the Bloomberg consensus to recommend selling to investors.

Meanwhile, investors investing in GOTO assessed that GOTO's decline in shares in recent days was more influenced by an overreaction after the lockdown period ended. In addition, negative sentiment that still occurs in technology stocks around the world also affects investor decisions to sell their shares.

East Ventures co-Founder and Managing Partner Willson Weather believes GOTO's performance will continue to improve, thus having a positive impact on business fundamentals and strengthening its share price.

"It will definitely improve, because the results of the latest report are improving," Willson said in his statement to the media.

In his research, Deutsche Research Analyst Bank AG Reena Verma Bhasin also still recommends GOTO shares with a target price of IDR 250 per share in the next 12 months.

Bhasin assessed that GOTO's performance in the third quarter of 2022 was far above expectations. It was driven by an on-demand business due to stronger acceptance rates and lower promotions.

GOTO's decision to establish a reference for new operational expenses amid lower labor and overhead costs will also have a positive impact on the company's performance.

"Our target price has not changed in IDR 250 per share. We still recommend purchases amidst better bottom line performance expectations and reduced external financing concerns," Bhasin wrote in his research.

Analysts see that GOTO's current share price is undervalued. When the sentiment for the lockdown period disappears, stocks are believed to recover. The same situation also occurs in technology stocks such as Meituan, Coupang, and Zomato.

That's why, a number of GOTO strategic investors remain optimistic that stock prices in the market will soon follow GOTO's rising fundamental performance.