Analysts Bullish Of Alibaba Stocks Ahead Of Q1 Earnings Report
RBC Capital Market's top analyst Mark Mahaney maintained an Outperform rating on the company, Smarter Analyst reported. Mahaney set the price target at $210, a rather bullish amount despite ongoing tensions between China and the United States.
"Based on intra-q points and model sensitivity work, we believe Street FQ14:19 estimates are reasonable," Mahaney said. He added that spectators will keep watching the online retail behemoth's profitability figures.
Mahaney further explained that while Alibaba is expected to release weak gross profit margins compared to its American counterpart, Amazon, the Chinese provider can keep up on stock prices due to its solid cash flow channels.
Ahead of its Q1 2019 earnings report release, Alibaba has been working to expand internationally. Financial experts have expressed optimism over the company's challenge to Amazon through its investments in other countries.
Steven M. Sears wrote on Barron's that there is a chance stocks will rebound to $200 despite fears of stock drops over the coming weeks. He said investors can sell the $175 stock and buy at a higher end when later when the stock reaches $200 and up.
Despite a huge wave of optimism among investors and analysts for Alibaba stocks, others are still wary of the potential downside that comes with buying the stock as a global slowdown beats on huge conglomerates.
Zacks' Benjamin Rains argued that the Chinese firm may have shown weakness earlier this year but it is still gaining big through its multiple subsidiaries including Tmall and Taobao. These digital commerce arms made up for around 87 percent of Alibaba's revenues in the previous quarter.
Rains explained that Zacks currently has Alibaba stocks on Hold due to market concerns about how the escalating China-U.S. trade war will affect Chinese companies, particularly the bigger, more established firms.
The trade dispute between China and the U.S. is said to have impacted Chinese firms targeting global markets. On the other hand, the bullish forecasts of most analysts have encouraged hope among investors looking to gain through Alibaba's multiple cash cows.
Improvements in Asian economies are also becoming a common ground for investors to gain hope from. Improving economic developments in the Philippines, Myanmar, Vietnam, and others in the Southeast Asian region has helped drive some stocks up.
Many analysts are still hoping that Alibaba stocks will strengthen and see hikes, in the long run, citing improving market atmospheres across the world, including China. Patience is necessary, experts said, but the Chinese stock is currently a good Buy choice, especially during the massive sell-off scenarios like this week.