MKM Boosts Price Target for Alibaba Group Holding Ltd (BABA) in Light of New Segment Disclosures
MKM analyst Rob Sanderson weighed in on shares of Alibaba Group Holding Ltd (NYSE:BABA), reiterating a Buy rating and lifting the price target from $95 to $130, after the e-commerce giant released its fiscal first-quarter results with improved financial disclosures.
Alibaba broke down its earnings results into four new operating segments: Marketplaces, Cloud, Mobile Media and Entertainment, and Other Initiatives. Following the new segment disclosure, Sanderson moved to a more detailed sum-of-parts valuation methodology, noting, “We remain bullish on the stock and think BABA will be the best performing large-cap in the Internet sector over the next 12-months.”
In addition, the analyst increased his CY17 non-GAAP EPS estimate from $3.70 to $4.00 per share. Sanderson added, “We have a higher revenue contribution from commerce (the highest margin segment) and lower estimates than previously for lower margin segments. The overall revenue is relatively unchanged.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Rob Sanderson is ranked #1,632 out of 4,127 analysts. Sanderson has a 58% success rate and yields 1.2% in his annual returns. When recommending BABA, Sanderson earns 15.5% in average profits on the stock.
TipRanks analytics demonstrate BABA as a Strong Buy. Based on 24 analysts polled in the last 3 months, 22 rate a Buy on BABA, while 2 maintain a Hold. The consensus price target stands at $110.53, marking a 16% upside from where the stock is currently trading.
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