J.P. Morgan analysts have maintained their bullish stance on the Hong Kong-listed Alibaba Group Holding Limited (HK:9988). Analyst Alex Yao reiterated his Buy rating on the stock and raised the price target from HK$117 to HK$120, citing strong growth momentum in its e-commerce divisions. With the revised target price, Yao projects a 51% upside potential for Alibaba’s stock. Meanwhile, analyst Thomas Chong from Jefferies also confirmed his Buy rating yesterday, predicting around 75% growth.
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Alibaba is known for its leadership in the online marketplace. Over time, the company has diversified into cloud computing, digital entertainment, logistics, and financial services. In 2024, its shares have seen a 15% increase.
JPMorgan Sees Massive Growth Potential
Yao expects Alibaba to maintain strong performance for the December quarter. He also highlighted the Double-11 shopping festival as a significant contributor to the company’s gross merchandise volume (GMV) across its Taobao and Tmall platforms.
Additionally, Yao foresees a boost in Alibaba’s core customer management revenue (CMR) growth, expecting it to rise from 2.5% in the September quarter to 6% in the December quarter. This improvement comes after a 0.6% commission monetization for Taobao was implemented in September 2024.
Overall, the analyst predicts that the adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for Taobao & Tmall will rebound to positive year-over-year growth, estimated at 6%. This recovery is attributed to increased monetization efforts and more strategic investment decisions.
Insights from TipRanks’ Bulls Say, Bears Say
TipRanks’ “Bulls Say, Bears Say” tool offers a glimpse into analysts’ views on Alibaba’s stock.
Optimistic analysts highlight Alibaba’s diversified business model, highlighting its international platforms, such as AliExpress and Lazada, and its Cloud division as significant growth contributors.
On the other hand, cautious analysts point to challenges in Alibaba’s financial outlook, noting that short-term earnings may face pressure from investments in new ventures. Additionally, intense competition from rivals like PDD Holdings (PDD) continues to erode its market share.
Is Alibaba Stock a Good Buy Now?
On TipRanks, 9988 stock has a Strong Buy consensus, based on four Buy recommendations. At HK$131.50, the Alibaba share price target implies a growth rate of 65.2% on the current trading price.
