Goldman Sachs Removes Alibaba From Conviction List; Still Keeps 'Buy' With 61% Upside

Goldman Sachs analyst Piyush Mubayi is removing Alibaba Group Holding Ltd BABA 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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