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Investing.com - Benchmark raised its price target on Alibaba (NYSE:BABA) to $195.00 from $176.00 on Tuesday, while maintaining a Buy rating on the Chinese e-commerce giant. The stock, currently trading at $135, has surged over 60% year-to-date, according to InvestingPro data, with a market capitalization of $301 billion.
The price target increase follows Alibaba’s F1Q26 results, which missed headline consensus expectations. Despite the miss, the company maintains strong fundamentals with a P/E ratio of 15.6x and healthy gross margins of 41%. Benchmark attributed the miss to revenue estimates that didn’t fully account for asset divestitures including SunArt and Intime, along with increased investment in Quick Commerce that pressured margins.
Alibaba’s cloud segment delivered strong performance with 26% year-over-year growth and guidance pointing to further acceleration. Benchmark highlighted this as reinforcing Alibaba’s position as China’s leading GenAI and cloud infrastructure provider.
In the e-commerce segment, Benchmark noted that while Quick Commerce investments impacted margins (approximately RMB10 billion in F1Q26 and RMB50 billion projected for FY26), these investments have strategic potential to be accretive by expanding long-term GMV total addressable market to approximately RMB1 trillion.
Based on these developments, Benchmark raised its FY26/FY27 growth forecasts for Alibaba and sees potential for market share gains, with room for multiple expansion supporting the higher price target. InvestingPro analysis suggests the stock is currently undervalued, with a "GOOD" overall financial health score of 2.94 out of 5. Get detailed valuation metrics and 12 additional ProTips with an InvestingPro subscription.
In other recent news, Alibaba’s financial performance has been under the spotlight with several analysts adjusting their price targets for the company. Despite Alibaba’s revenue and EBITA falling below expectations, Mizuho has raised its price target to $159, citing the company’s ongoing divestitures and increased investments. Similarly, Morgan Stanley increased its target to $165, driven by expectations of over 30% growth in Alibaba’s cloud division, Alicloud, and sustained growth in customer management revenue. BofA Securities also raised its target to $152, noting the acceleration of Alibaba’s cloud revenue growth to 26% year-over-year. Meanwhile, Bernstein adjusted its price target to $160 following Alibaba’s Q1 earnings report, which showed mixed results but highlighted positive operational metrics. Goldman Sachs increased its target to $163, focusing on Alibaba’s AI initiatives, although they anticipate larger losses in the quick commerce sector for the upcoming quarter. These recent developments reflect a strong focus on Alibaba’s cloud and AI sectors, despite challenges in other areas.
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