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Deutsche Bank Finds Support For Growth Assumptions At Alibaba's Investor Day

Deutsche Bank Finds Support For Growth Assumptions At Alibaba's Investor Day
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During its Investor Day, Alibaba Group Holding Ltd (NYSE: BABA) offered details of its major businesses and provided its annual revenue guidance for the first time. Deutsche Bank’s Alan Hellawell maintained a Buy rating for the company, with a price target of $110, while naming the stock as a top pick.

Favorable Guidance

“We were impressed with the breadth and depth of business units and affiliates on display… [Alibaba] delivered on recent company pledges to broaden and deepen disclosure across BABA’s major businesses,” analyst Alan Hellawell commented. The company guided to 36 percent revenue growth for FY17, compared to the consensus expectation of 31 percent and the DB estimate of 35 percent.

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“A confident management tone suggests that 36% may act as a low water mark for an event that is impressively still three reported quarters away,” Hellawell wrote. The guidance supports the expectations of continued strength in the monetization of mobile ecommerce, a growing cloud business, and other components.

“Discussions around cloud, and increased merchant ad spend on better targeting were specifically supportive of our growth assumptions,” the analyst said. Alibaba conveyed a prominent globalization theme. The Investor Day, among other things, should have largely eased concerns that have been impacting sentiment since the 2014 IPO.

Latest Ratings for BABA

Jan 2018KeyBancMaintainsOverweightOverweight
Dec 2017SusquehannaInitiates Coverage OnPositive
Nov 2017OppenheimerMaintainsOutperform

View More Analyst Ratings for BABA
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