Brean Capital Raises Price Target on Alibaba (BABA) to $115 on Strong 1Q Results
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Brean Capital reiterated a Buy rating on Alibaba (NYSE: BABA), and raised the price target to $115.00 (from $100.00), following the company's 1Q earnings report. Revenue came in at RMB 32.2bn, exceeding consensus estimates of RMB 30.1bn. Adjusted EPS came in at $0.74, exceeding consensus of $0.62 on operating leverage from higher core ecommerce revenue.
Analyst Fawne Jiang commented, "BABA reported strong FY1Q17 results and reiterated its FY2017 revenue growth guidance of 48%+. The stronger-than-expected revenue growth was mainly driven by growth of its China commerce retail business on the back of both traffic and monetization improvement. Going forward, we expect BABA’s core ecommerce business to remain solid with high and sustainable margin outlook driven by 1) improving monetization trend as the company continues to build a multi-dimensional platform where merchants and consumers can seamlessly engage. This should help to drive user engagement through social ecommerce transformations and command higher pricing with broadened value propositions to merchants; 2) mobile transition with increasing upward trends for both mobile traffic and mobile monetization; and 3) further reshaping of Chinese consumer’s shopping behavior through community, social and personalization leveraging big data technology. Moreover, the company continues to build its ecosystem in a staged growth strategy. Particularly, we are encouraged to see accelerated growth of BABA’s cloud business with narrowing operating loss, which could emerge as the next growth engine for BABA. As such, we reiterate our Buy rating on BABA stock and raise our TP to $115 (from $100)."
Shares of Alibaba closed at $91.77 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesEarnings, Brean Capital
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