Credit Suisse Starts Alibaba (BABA) at Outperform

(Updated at 10:59 AM)

Credit Suisse initiated coverage on Alibaba (NYSE: BABA) with an Outperform rating and a price target of $114.

Analyst Dick Wei said, "We forecast a ~37% revenue CAGR over the next three years driven by new products and services, monetisation improvements, and synergies with its several investment portfolio companies/affiliates. This revenue growth, combined with the incomparable scalability (it is the largest e-commerce ecosystem in the world) and operating leverage should help the company deliver sustainable earnings in the coming years."

"We have performed a proprietary analysis to derive our estimates on Alibaba's growth potential by specific product categories and identify the areas within the ecosystem for potential take-rate improvements. With ~US$10 bn of investment in various companies in mobile, social and new categories, we expect Alibaba to tap into various aspects of people's daily life. We also see the option value in new businesses and Ant Financial (valuation of US$52.8 bn) to provide further upside," he added.

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 $99.68 yesterday.

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