JPMorgan analyst Alex Yao lowered the firm’s price target on Alibaba (BABA) to $120 from $125 and keeps an Overweight rating on the shares. The firm says Alibaba’s fiscal Q2 results reinforce its view that Alibaba is the only large Chinese e-commerce platform that still has sizable user growth upside potential and, therefore, near-term profitability might be negatively affected due to user acquisition effort. The company’s investments on users are bringing more merchandise volume despite short-term financial uncertainties, the analyst tells investors in a research note.
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