Goldman Sachs and Morgan Stanley betting on Alibaba shares

Goldman Sachs and Morgan Stanley betting on Alibaba shares

By Tiffany Smith

Budrigannews.com – Alibaba shares in Hong Kong: ( NYSE:) have continued to rise at the start of a new trading week, aided by a number of encouraging catalysts.

As investors continue to hold out hope that China will relax its regulatory crackdown, the announcement that Alibaba founder Jack Ma will hand over control of the fintech giant has boosted Alibaba stock. In addition, Ant met with UK Prime Minister Rishi Sunak to discuss a possible London IPO, as reported by the Financial Times earlier today.

On Monday, analysts at Goldman Sachs and Morgan Stanley added Alibaba to their lists of Top Picks, providing the company with additional support.

In light of China’s faster-than-expected reopening, macro recovery from Q2, and normalizing internet regulations, Goldman analysts highlighted Alibaba as one of the primary beneficiaries. The stock is added to Goldman’s Conviction List as a result.

“In 2023, we expect Alibaba to be 11X. P/E as a good proxy for advertising recovery, fintech (via. “We believe the worst is behind us after two years of downward earnings revisions with the largest room for valuation multiple repair among the mega-caps as its top line growth resumes and 2022-25E earnings resume to mid-teens growth, add to CL as we believe the worst is behind us,” the analysts stated in a client note. 33%-owned Ant) and cloud structural growth.

The stock of Alibaba, according to Morgan Stanley analysts, is “mispriced at ex-growth F24e P/E of 11x.”

“We believe that operating efficiency and inflection in CMR and cloud will drive an 18% adjusted EBITA CAGR in F2023-26e. “A key catalyst is easing regulation, especially on fintech,” the analysts wrote in a report on Alibaba.

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Consequently, Morgan Stanley has elevated Alibaba stock to a “non-consensus Top Pick” for the first time in three years.

After soaring by 2.7% on Friday, Alibaba shares are up nearly 5% in the pre-market on Monday.