Goldman Sachs analyst Piyush Mubayi is removing Alibaba Group Holding Ltd from his firm's Conviction List but keeping a Buy rating on the shares with a price target of $215, down from $252, implying a 61.2% upside.
- Alibaba has been increasing its investments on both defensive-offensive strategies amid slowing retail spending and budding competition to acquire new users, build multiple traffic sources, and in the shorter term, raise merchant subsidies to retain merchants.
- Mubayi expects revenue growth to decelerate to 13%/16% in Q3/Q4.
- The analyst also expects the aggressive buybacks to continue and the investment portfolio to be revisited.
- Mubayi believes the negatives have been priced.
- Mubayi is constructive on Alibaba on its extreme valuation.
- Price Action: BABA shares traded higher by 0.16% at $133.57 in the premarket session on the last check Monday.
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