UPDATE: Alibaba (BABA) PT Raised to $220 at MKM Partners

MKM Partners raised its price target on Alibaba (NYSE: BABA) to $220.00 (from $177.00) while maintaining a Buy rating.

Analyst Rob Sanderson expects FY commerce growth of 50% compared with 47% previously. He ranks BABA as a Top Pick among internet mega-caps and believes the company has the best fundamentals of the group. The analyst also gives six reasons for his view on BABA:

1. end-markets are higher growth and showing acceleration
2. traffic growth and personalization is driving meaningful monetization improvement
3. we think ad load can be expanded at management’s discretion, driving continued top-line expansion
4. cloud is earlier stage in China and Alicloud’s dominance may be less contested than AWS in the West
5. eCommerce adoption in Southeast Asia is accelerating and just beginning
6. commerce segment margin is still +60% while major investments (Lazada, rural China, Tmall supermarket), are being absorbed.

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