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Investing.com - Goldman Sachs has raised its price target on Alibaba (NYSE:BABA) to $163.00 from $147.00 while maintaining a Buy rating. The stock, currently trading at $135, appears undervalued according to InvestingPro analysis, with the company showing impressive YTD returns of ~62%.
The firm expects Alibaba to face steeper September quarter losses from its quick commerce business, projecting a loss of 31 billion yuan compared to the 11 billion yuan loss in the June quarter.
Goldman Sachs anticipates that loss per order will halve in the December quarter as Alibaba focuses on higher quality users, subsidy normalization, and rider efficiency improvements.
The firm predicts Alibaba’s food delivery and quick commerce market share will eventually settle at 40%, revising its long-term assumption to a 5:4:1 ratio between Meituan, Alibaba, and JD.
Goldman Sachs adjusted its fiscal 2026-2028 adjusted net profit estimates by -9% to +2%, citing larger quick commerce losses partially offset by faster international e-commerce turnaround, while lowering its sum-of-the-parts discount to 15% from 20% due to streamlined core businesses.
In other recent news, Alibaba Group Holding Ltd reported a 10% year-over-year increase in revenue for the first quarter of 2025. The company also highlighted significant investments in artificial intelligence and cloud infrastructure, which are part of its strategic initiatives to drive future growth. Despite these positive developments, Alibaba experienced a decrease in adjusted EBITDA and a free cash flow outflow during the same period. In addition, JPMorgan has raised its price target for Alibaba to $170, up from $140, while maintaining an Overweight rating. The investment bank cites Alibaba’s food delivery and quick commerce operations as key drivers of efficiency gains, drawing parallels with competitor Meituan. These recent developments indicate Alibaba’s continued focus on expanding its technological capabilities and operational efficiency.
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