Alibaba's (BABA) Price Target Trimmed to $109 at Deutsche Bank; Analyst Maintains 'Buy' Rating

August 24, 2016 7:32 AM EDT
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Price: $103.94 --0%

Rating Summary:
    35 Buy, 3 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 27 | New: 31
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Deutsche Bank maintained a Buy rating on Alibaba (NYSE: BABA) and trimmed its price target to $109.00 (from $115.00).The bank also reduced FY17/18/19 revenue estimates by 2%.

In the note, analyst Alan Hellawell discussed Taobao's social element.

"One of the most startling revelations from Alibaba's June earnings call is that users launch Taobao seven times per day. Having introduced various new social features such as Quanzi, Wendajia, Taobao Newsfeed, and Taobao Live Broadcast this and last year, we study herein what these and other innovations around community and content have done to add a social element to the Taobao experience, and thus deepen user engagement," said Hellawell.

"Management on the call noted that the Taobao DAU/MAU ratio continues to rise, as does average user time spend. Average time spend per user on Mobile Taobao impressively reached 26.7min in June, (vs Amazon's 9min, Snapchat's 30min and Facebook's 35min). Increasing user engagement benefits merchants both big and small. We believe that Alibaba seeks to increase ad inventory, and add less premium, other non-front page ad products, in order to appeal to the 'middle of the pyramid' brands with smaller budgets that don't enjoy the high touch of Alibaba's marketing teams and bespoke programs that their larger peers do. Targeted personalization has exposed shoppers to less known brands, when previously they may have only seen ads from big brands," added the analyst.

For an analyst ratings summary and ratings history on Alibaba click here. For more ratings news on Alibaba click here.

Shares of Alibaba closed at $95.79 yesterday.

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