Alibaba (BABA) Receives a Buy from SunTrust Robinson

By Carrie Williams

In a report issued on May 13, Youssef Squali from SunTrust Robinson maintained a Buy rating on Alibaba (BABAResearch Report), with a price target of $200. The company’s shares closed yesterday at $174.84.

Squali commented:

“We maintain a Buy/$200 PT going into F4Q19 earnings due out Wed. 5/15 BMO. The latest data out of NBS suggests that the macro environment has been improving, a positive for Chinese consumption, and for BABA in particular. The latest moves by the White House bring greater uncertainty, however, as to the sustainability of these improvements ST; LT we view BABA as a winner considering 1) its dominance of the Chinese ecom. mkt and the insatiable appetite for China’s growing middle class, 2) it’s a 25%+ compounder over the next 5 yrs (our ests), and 3) its portfolio of strategic invests (see SOP). Expectations vs. Consensus. We expect net revenue of 88.5B RMB (+33.7% Y/Y excl. Ele.me) vs. consensus of 91.6B RMB. We expect EBITA of 22.8B RMB vs. consensus of 19.8B RMB.”

According to TipRanks.com, Squali is a top 100 analyst with an average return of 22.7% and a 70.3% success rate. Squali covers the Technology sector, focusing on stocks such as Match Group Inc, Trade Desk Inc, and Cardlytics Inc.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Alibaba with a $215.62 average price target, a 23.3% upside from current levels. In a report issued on May 7, KeyBanc also maintained a Buy rating on the stock with a $240 price target.

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Alibaba’s market cap is currently $449.7B and has a P/E ratio of 43.88. The company has a Price to Book ratio of 6.70.

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