Alibaba Share Price Target Dips At BofA – What To Expect From Earnings?

As Alibaba (NYSE: BABA) sits on the verge of reporting its earnings, analysts at BofA have come in with a pre-emptive price target adjustment on the stock, revising down their mark from $102 to $99.

In the preview note, the analyst holds the ‘buy' ratings, and points to an expected year over year increase in revenue of 6% (RMB220.7b), accelerating from last quarter's 5% growth. The firm an accelerated Taobao Tmall revenue growth rate being the primary cause.

Over the last two months BABA share price has added an impressive 15.3% and now sits right within the middle of it's 52 week high/low range at $84.60 (high 102.5. low 66.63). So what are other market players expecting from this report?

Looking at the March-end quarter (Q4), analysts are looking for Alibaba to report total revenue of $30.39B with an EPS of $1.41.

Financial analysts are forecasting a buoyant outlook for Alibaba's fiscal year of 2024. The consensus estimates peg the company’s EPS at $8.63, a notable increase from $7.64 in the previous year. Such optimistic projections are bolstered by an anticipated 7.1% year-over-year expansion in revenues, amounting to a substantial $130.2 billion.

Earlier this year, Alibaba innovatively split its business into six distinct divisions in a strategic move to streamline its operation and mitigate regulatory scrutiny in China. This reorganization exemplifies the company's agility in adapting to the dynamic regulatory landscape, ensuring sustainable growth and investor confidence.

Amidst its operational restructuring, Alibaba has also been active with its capital allocation, having repurchased an impressive $12.5 billion worth of shares. This aggressive buyback program underscores the company’s belief in its intrinsic value and commitment to shareholder returns.

The consensus price target from analysts of $104 represents a 25% upside potential in BABA stock prices, but know the speed at which firms can change their targets means this is an indicator more than anything else. From a shareholder value perspective, with dividends and buybacks, Alibaba is expected to furnish an annual return of 4% for the coming three years.

Alibaba stands in the middle of a positive trend, but still very firmly in the middle of the 52 week range. The direction from here will not be without bumps, and despite this, many still see significant upside potential. As Alibaba navigates through strategic shifts, the next phase could be significant AI investment.

Coming off the back of a strong day for the US listed BABA, where the stock price added 5.7%, the Hong Kong Listed entity (HKG: 9988) trades up more than 2% today, as BABA sits down 0.89% in the premarket.