Goldman Sachs maintained a Buy rating and $134 per share price target on Alibaba (NYSE:BABA) in a note to clients Friday.
Analysts told investors that they see upside ahead for the stock based on a favorable risk/reward.
“With [the] current market cap (US$209bn) implying 8.7X this year’s earnings or 6.4X ex-cash compared with double-digit EPS growth potential ahead, we believe the share price decline post-results has been overdone and see favorable risk-reward given limited downside on our bull/base/bear valuation of US$191/$134/$74,” the analysts wrote.
“We continue to view valuation as attractive as current market cap suggests a value for the underlying Taobao+Tmall business of c.6.5X NOPAT after adjusting for net cash on hand (over US$60bn end-2QFY24E), without valuing any of its ex-domestic eCommerce/cloud businesses, with double-digit EPS growth potential on the back of mid-single digit CMR growth, mid-single digit share count reduction yoy and further loss reductions at other businesses,” they added.
Along with PDD and Kuaishou, Alibaba continues to be the investment bank’s top Buy ideas in eCommerce.
