Online retail exploded over the last year and a half. As consumers were stuck at home riding out the COVID-19 pandemic, they took to their devices and started purchasing. Although online retail may be taking a bit of a breather from last year’s frenzy, the industry is still ripe for the investing, and the Alibaba Group (BABA) is there to get the job done. (See Alibaba stock chart on TipRanks)
Vincent Yu of Needham & Company reported on the stock, stating that although a slowdown in retail sales is expected, he is maintaining his estimations for profits from Alibaba. These projections come before the company reports its earnings, later in the summer.
Yu reiterating his Buy rating on the stock, and declared a price target of $330. This target would reflect a potential 12-month upside of 58.65%.
The four-star analyst did, however, lower his revenue expectations, but that did not stop him from adding that the current valuation of the stock is compelling for entry.
Regarding regulatory challenges, Yu wrote that he believes “the worst period is over for Alibaba and further downside is limited.” He was enthusiastic about the company’s approach to the growing online grocery business, stating that it is attacking the market “with an omnichannel strategy.”
Furthermore, Yu went on to describe the current shift in management in Alibaba, stating that the company had replaced the head of its local services team. The analyst expects to see impressive business practices in the online delivery subsidiary Eleme. Inc, web mapping program Autonavi, and the online travel platform Fliggy.
On TipRanks, BABA has an analyst rating consensus of Strong Buy, based on 24 Buy ratings and 1 Hold rating. The average Alibaba price target is $298.33, suggesting a potential 12-month upside of 43.43%. BABA closed Wednesday at a price of $208 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.