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Why Most Analysts Are Still Bullish on BABA Stock

By and large, Wall Street’s experts are optimistic about Alibaba (NYSE:BABA) stock. They’re giving Alibaba high ratings and anticipating strong share-price appreciation. Furthermore, the commentary of some analysts should shed some light on why they’re still feeling bullish about Alibaba.

Even though Alibaba is an e-commerce giant, 2022 was a tough year for the company. Supply chain disruptions, global recession fears and on-and-off Covid-19 lockdowns made it more difficult for Alibaba to conduct its business.

Nevertheless, Alibaba has demonstrated resilience, and analysts are undoubtedly impressed. Perhaps you might choose to invest in Alibaba if you anticipate improvement in China’s economic conditions and in Alibaba’s financial stats.

BABA Stock Gets Strong Ratings on Wall Street

Out of 14 analysts on Wall Street, all 14 of them issued a “buy” or equivalent rating to BABA stock. Furthermore, the analyst consensus price target of $146.23 implies significant upside potential for the Alibaba share price.

Granted, not every analyst raised his or her price target on the stock. In fact, analysts with Susquehanna reduced their target price on Alibaba shares from $185 to $175, but they maintained a “positive” rating on the stock.

Per The Fly, a Susquehanna analyst observed that “trends are improving” in spite of “earlier weakness.” Moreover, while “pandemic and macro-related headwinds may continue to cause periods of softness in the near-term,” the analyst views “Alibaba as the main China e-commerce player with a large secular growth opportunity.”

The Reopening of China’s Economy Drove Growth for Alibaba

Meanwhile, Truist analyst Youssef Squali raised his target price on BABA stock from $120 to $130. He also maintained a “buy” rating on Alibaba shares.

Squali cited Alibaba’s results from the December quarter. Per The Fly, Squali feels that these results “show continued improvement in margins amid a tough demand environment in China and overseas.” That’s a fair point, as Alibaba’s operating margin improved to 14% from just 3% in the year-earlier quarter.

In addition, Squali notes that “while Alibaba’s March quarter started weak, demand trends have improved materially since then with the economy reopening, driving positive growth.” It’s possible, then, that Alibaba’s financials could benefit if China’s economy accelerates this year.

In any case, it’s incontestable that Alibaba showed resilience during the December quarter. Believe it or not, on a year-over-year (YOY) basis, the company’s income from operations increased 396%. Also, Alibaba’s net income rose 138% during that time frame.

So, Is it Time to Buy BABA Stock?

If you’re considering a share position in Alibaba, you’ll definitely want to keep tabs on China’s economy. If it improves this year, so should Alibaba’s fiscal results.

At the moment, it looks like Wall Street is generally optimistic about Alibaba. Of course, you have to conduct your own due diligence and come to your own conclusion. Still, Alibaba’s growth and resilience have been quite impressive, so right now is a good time to consider buying BABA stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.