Alibaba Added To Goldman's Asia Conviction Buy List

Alibaba Group Holding Ltd's BABA impressive run in which its stock has returned more than 50 percent over the past six months has caught the attention of analysts at Goldman Sachs who have added the name to its "Asia Pacific Conviction Buy List."

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Goldman Sach's Piyush Mubayi discussed in a note Friday the decision to add the name to its "Conviction Buy List" stems from its fiscal quarter results - which were not only "better than expected" but showed an "even stronger" growth and margin outlook and "dominance" across several of its business.

Related Link: Deutsche Maintains Alibaba As A Top Pick, Lifts Price Target To $115

Specifically, growth in Alibaba's quarterly and China retail revenues were at the highest levels seen since its initial public offering and driven by a re-acceleration in gross merchandise volume (GMV) and higher mobile monetization.

Mubayi added that Alibaba's AliCloud is expected to be profitable within two years and similar to Amazon's AWS, it will enhance the company's proposition and drive higher average revenue per user. In addition, Alibaba offered an "improving outlook" for Cainiao and Ant Financial, both of which have undertaken infrastructure upgrades and deliver improvements over the next 6 to 12 months.

Shares remain Buy rated with a price target raised to $120 from a previous $104, with a bull case upside of $137.