Bank Of America Raises Alibaba Price Target

Bank of America raised its price target from $122 to $132 on Alibaba Group Holding Ltd BABA Tuesday amid Singles Day momentum.

Analysts led my Eddie Leung noted that “this year, GMV in the 1st hour stood at RMB12b, up ~70 percent YoY. Although we expect growth to decelerate during the later part of the day, we still see upside to our previously conservative estimates of sub-55 percent growth on the day and 52 percent growth in the quarter.”

“Conversations with leading merchants in footwear and beauty products indicate that Alibaba remains the most important online platform given its unmatched traffic scale and user reach in lower tier cities.

“Hence, merchants view it as a branding channel in addition to a distribution platform, and are willing to spend most of their online marketing budgets on Alibaba.

“Regardless of their industry cycles, both merchants expect online sales proportion to rise multiple times for them in next few years,” according to Leung.

The analyst note concluded with an upward revision to the “2015-17E adj. EBITDA moderately by 1-5 percent” and it was expected that “the recent share price rally [already] factored in part of the momentum.”

Alibaba recently traded at $115.34, down 3.2 percent.