Improvements Continue At Alibaba; Keybanc Raises Price Target

Shares of Alibaba Group Holding Ltd BABA hit a new all-time high of $169.50 on Friday and are now higher by more than 90 percent since the start of 2017. According to some analysts, there is still further upside ahead.

KeyBanc Capital Markets' Hans Chung maintains an Overweight rating on Alibaba's stock with a price target boosted from $160 to $182 after the company reported strong revenue growth in its earnings report.

Alibaba grew its revenue by 56 percent year-over-year in its fiscal first quarter, mostly due to strength in its core eCommerce business, Chung noted in a report. The company's gross margin and earnings per share of 65.2 percent and $1.17 also exceeded expectations of 62.7 percent, and 93 cents per share, respectively.

More important to the China-based company's story, the strong earnings report came at a time of increasing promotional activity, the analyst said. The company's improvement in monetization more than offset incremental spending in the quarter and the upward trend of monetization improvements are expected to continue.

The analyst's revised $182 price target is based on the following sum of the parts: 1) core eCommerce valued at $146.70 per share, 2) AliCloud valued at $12.90 per share, 3) DEM (Digital Media and Entertainment) valued at $3.00 per share, and 4) strategic investments valued at $19.40 per share.

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