The Country Caller shares why Wall Street analysts have such a bullish stance on Alibaba stock
Alibaba Group Holding Ltd (NYSE:BABA) stock shed 2.53% of its value through regular trading Friday, as it closed at $77.16. The stock has declined 5.06% since the start of this year through May 13, 2016, against the S&P 500 Index’s gain of 0.13%.
The chart below shows Alibaba’s stock price performance year-to-date. The stock price witnessed a slump during the mid of February, however, it regained the momentum by the end of the month.
The China based e-commerce business has shown solid financial performance over the past quarters and the Street has always been mostly bullish on the stock. A total of 43 analysts at the Street provide coverage on Alibaba stock. Of these, a massive majority of 37 analysts, who account for 86% of the total analysts covering the stock, recommend investors to take a long position on the stock. The remaining six believe holding the stock would be the best maneuver for shareholders. There are no Sell ratings on the stock currently.
The 12-month consensus price target on the stock is $97.23, reflecting a return potential of 26% against the stock’s last closing price. Billy Leung, an analyst at Haitong International, expects the most out of the stock, which is why he has the most bullish stance on it. Mr. Leung holds a $120 price target on the stock and recommends investors to Buy it.
On the other hand, CM Research analyst Cyrus Mewawalla has the most bearish outlook on the stock. Mr. Mewawalla projects Alibaba stock price to tank to $59.21 and believes shorting the stock is appropriate.
As per the latest short interest data released on April 29, 2016, the number of shorted Alibaba shares stand at 81.66 million shares, declining 4.28% against the previous settlement date. The number of shorted shares account for 3.29% of the total float in the market.