Market Overview

KeyBanc Likes Alibaba's Alimama, Sees Upside Potential

Share:
KeyBanc Likes Alibaba's Alimama, Sees Upside Potential

Alibaba Group Holding Ltd (NYSE: BABA) is up 37 percent in 2019, but one analyst still claims upside potential.

The Rating

KeyBanc Capital Markets analyst Hans Chung maintained an Overweight rating on the stock but raised his price target from $210 to $240.

The Thesis

Chung expects Alibaba to remain a “leader and pioneer” in e-commerce, particularly as it develops Alimama. (See the analyst's track record here.) 

The platform recently opened registration for merchants to test a “Super Recommendation” marketing feed, which was previously accessible by invite only. KeyBanc interprets the expansion as a sign of positive ROI and forecasts an official launch by the second half of 2020.

“We expect feed monetization to be meaningfully incremental to the model as recommendation feed traffic has been larger than search,” Chung wrote in a note. He expects revenue in the third quarter of 2020.

The analyst also anticipates margin improvement as Freshippo stores ramp and mature through 2020. “We estimate operating margin of Freshippo to improve from a low-teens percentage loss in F2Q19 to negative low single digits by F4Q20,” he wrote.

Price Action

At time of publication, Alibaba shares traded down 2.9 percent at a rate of $182.80. The stock has been under pressure this week amid trade war concerns.

Related Links:

This Analyst Loves Alibaba's 'Super App'

Office Depot Partners With Alibaba To Empower Small Businesses Online

Photo courtesy of Alibaba.

Latest Ratings for BABA

DateFirmActionFromTo
Aug 2020Argus ResearchMaintainsBuy
Aug 2020B of A SecuritiesMaintainsBuy
Aug 2020Raymond JamesMaintainsStrong Buy

View More Analyst Ratings for BABA
View the Latest Analyst Ratings

 

Related Articles (BABA)

View Comments and Join the Discussion!

Posted-In: Alimama Hans Chung KeyBanc Capital MarketsAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
ZTSAtlantic EquitiesInitiates Coverage On191.0
VIRHC Wainwright & Co.Maintains80.0
VKeyBancMaintains230.0
SKTKeyBancUpgrades
BIIBRBC CapitalMaintains277.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com