Summit Research Maintains Buy on Alibaba (BABA) Despite Challenging Environment
Summit Research reiterated a Buy rating and $91.00 price target on Alibaba (NYSE: BABA) despite a challenging environment.
Analyst Henry Guo commented, "While international commerce currently only accounts for less than 10% of total revenue for Alibaba Group, we believe this segment has potential to become increasingly material to the company in the coming quarters, likely driven by (1) moderating currency headwinds as Chinese Yuan has depreciated 6%-7% against USD over the last month or so; (2) AliExpress’s further penetration among global consumers; (3) Alibaba’s rapid international fulfillment and delivery ramp-up over the latest several quarters; and (4) further improvement of Alibaba’s export commerce ecosystem. While near term BABA shares likely remain pressured by low visibility to macro-environment and intensifying competition, long term we remain positive on the company’s growth potential. We reiterate our BUY rating on BABA shares with PT of $91, which represents a P/E multiple of 35x our F2016 non-GAAP EPS estimate."
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Shares of Alibaba closed at $64.83 yesterday.