How an­a­lysts rate Alibaba be­fore quiet pe­riod ends

Financial Mirror (Cyprus) - - FRONT PAGE -

This week will mark the end of the an­a­lyst quiet pe­riod for Alibaba Group Hold­ing Ltd. (NYSE: BABA). Some have still is­sued bro­ker­age firm re­ports ahead of the for­mal un­der­writ­ers’ an­a­lysts. Keep in mind that Alibaba’s ini­tial pub­lic of­fer­ing (IPO) price was $68 and shares started trad­ing on Septem­ber 19. The shares opened at $92.70 on the first day of trad­ing, and Alibaba raised some $21.8 bln in the largest ever U.S. IPO, with the deal be­ing closer to $25 bln if un­der­writ­ers wanted to ex­er­cise the over­al­lot­ment op­tion in full. Alibaba closed at $95.76 on Fri­day, Oc­to­ber 25, against a post-IPO range of $82.81 to $99.70. We have in­cluded firm-by-firm an­a­lyst cov­er­age, which in­cludes a price tar­get, rel­a­tive share prices at the time and color if avail­able.

Bank of Amer­ica Mer­rill Lynch ini­ti­ated its cov­er­age of Alibaba with a Buy rat­ing, and it as­signed a $112 price ob­jec­tive on Oc­to­ber 17, with shares trad­ing around $88 at the time. The firm talked up Alibaba’s plat­form strat­egy and net­work ef­fect with a sta­ble mon­eti­sa­tion rate off­set­ting a mix shift to lower-tax-rate mo­bile chan­nel.

Bar­clays ini­ti­ated Alibaba with an Over­weight rat­ing and price tar­get of $107, due to its lead­ing on­line com­merce ecosys­tem hav­ing a com­bined 80% mar­ket share in C2C and B2C seg­ments. The firm sees up­side po­ten­tial for its mon­eti­sa­tion rate, syn­er­gies across mar­ket­places, lever­ag­ing big data anal­y­sis and cloud in­fra­struc­ture. BMO Cap­i­tal Mar­kets ini­ti­ated cov­er­age with an Out­per­form rat­ing with a $110 price tar­get.

CRT Cap­i­tal started cov­er­age back on Septem­ber 18 with a $95 price tar­get, im­me­di­ately ahead of the IPO and first day of trad­ing. Mac­quarie ini­ti­ated cov­er­age with a Neu­tral rat­ing back on Oc­to­ber 8, with a mere $88 price tar­get at the time. The firm be­lieves growth will con­tinue, but noted that it is val­ued at 26 times ex­pected 2016 earn­ings al­ready when com­pe­ti­tion is heat­ing up.

MKM Part­ners is­sued a Buy rat­ing back on Septem­ber 22. Its price tar­get was all the way up at $125, ver­sus a price of roughly $94 at that time.

Susque­hanna started cov­er­age as Pos­i­tive back at the end of Septem­ber. Its price tar­get was up at $110, while the stock was close to $90 at that time. UBS started its cov­er­age back on Oc­to­ber 14. The firm is­sued a Buy rat­ing and a $100 price tar­get, at the time when shares were closer to $85. So, who else will ini­ti­ate re­search cov­er­age for Alibaba this week? Credit Suisse, Deutsche Bank, Gold­man Sachs, J.P. Mor­gan, Mor­gan Stan­ley and Cit­i­group were the joint bookrun­ners on the deal.

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