Ahead of its Q1 earnings scheduled for August 15, Alibaba (NYSE: BABA) stock has shown strong performance in recent months, as investors believe that the report will bring good news to BABA stock.
Furthermore, Lazada, a subsidiary of Alibaba, has reportedly reached profitability, as disclosed by its CEO James Dong during an internal meeting on August 13, a positive development as Alibaba looks to expand its international presence in the retail sector and counter the effect of slowing China sales.
Wall Street analysts predict the company will report earnings of $2.09 per share for the second quarter, a decrease from $2.42 in the same period last year. Despite the decline in earnings, analysts anticipate a 3.7% year-over-year increase in revenue, projecting it to reach $34.59 billion.
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BABA shares are currently trading at $81.10 after a slight loss of 0.01% in the latest trading session, which comes as a negative development after the previous five trading days recorded a 2.76% gain.
Wall Street seems optimistic about Alibaba stock
Wall Street analysts believe that Alibaba’s Q1 earnings report should provide much-needed insight into how the retail giant performed during the summer months of June and July.
On August 14, Bank of America raised its price target for Alibaba stock to $106 while maintaining its “buy” rating ahead of its first-quarter FY24 results, expected on August 15.
Analysts estimate a 6% year-over-year revenue growth to RMB247.8 billion, aligning with consensus, with core Taobao Tmall (TT) revenues rising by 1.9%. They project a 2.3% year-over-year increase in China marketplaces’ CMR to RMB81.5 billion ($11.4 billion), driven by mid-to-high single-digit GMV growth, despite a slight decline in the monetization rate as GMV shifts towards Taobao.
In light of better customer reviews for its subsidiary platforms, Taobao and Tmall, Jefferies analysts reaffirmed their “buy” rating and price target of $116 for BABA stock. They believe that free refund policies, user experience scores, and service fee models will attract more customers.
Citi analyst Alicia Yap shares the same sentiment on July 29, as it retains a “buy” rating for BABA shares, maintains the target price at $122, and has an optimistic outlook for the August 15 earnings report.
General analyst consensus favors Alibaba stock
Looking at the Wall Street average price target and ratings for the Chinese e-commerce giant, the sentiment is overwhelmingly bullish on Wall Street, as they grade BABA stock as a “strong buy” based on 12 experts’ opinions. Of these, 11 advised a “buy,” while only one recommended a “hold.”
The average price target is $110.33, indicating a 36.29% upside from current BABA share price levels.
All eyes remain on the August 15 quarterly report, which will allow for more precise price targets and let analysts thoroughly assess Alibaba’s fundamental aspects, allowing them to revise their price targets for the upcoming 12 months.
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