How Analysts Rate Alibaba Before Quiet Period Expiration

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This week will mark the end of the analyst quiet period for Alibaba Group Holding Ltd. (NYSE: BABA). Some analysts have still issued brokerage firm reports ahead of the formal underwriters’ analysts. 24/7 Wall St. wanted to see how the preliminary group of analysts have issued their ratings.

Keep in mind that Alibaba’s initial public offering (IPO) price was $68 and shares started trading on September 19. The shares opened at $92.70 on the first day of trading, and Alibaba raised some $21.8 billion in the largest ever U.S. IPO, with the deal being closer to $25 billion if underwriters wanted to exercise the overallotment option in full. Alibaba closed at $95.76 on Friday, October 25, against a post-IPO range of $82.81 to $99.70.

We have included firm-by-firm analyst coverage, which includes a price target, relative share prices at the time and color if available.

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Bank of America Merrill Lynch initiated its coverage of Alibaba with a Buy rating, and it assigned a $112 price objective on October 17, with shares trading around $88 at the time. The firm talked up Alibaba’s platform strategy and network effect with a stable monetization rate offsetting a mix shift to lower-tax-rate mobile channel.

Barclays initiated Alibaba with an Overweight rating and price target of $107, due to its leading online commerce ecosystem having a combined 80% market share in C2C and B2C segments. The firm sees upside potential for its monetization rate, synergies across marketplaces, leveraging big data analysis and cloud infrastructure.

BMO Capital Markets initiated coverage with an Outperform rating with a $110 price target.

CRT Capital started coverage back on September 18 with a $95 price target, immediately ahead of the IPO and first day of trading.

Macquarie initiated coverage with a Neutral rating back on October 8, with a mere $88 price target at the time. The firm believes growth will continue, but noted that it is valued at 26 times expected 2016 earnings already when competition is heating up.

MKM Partners issued a Buy rating back on September 22. Its price target was all the way up at $125, versus a price of roughly $94 at that time.

Susquehanna started coverage as Positive back at the end of September. Its price target was up at $110, while the stock was close to $90 at that time.

UBS started its coverage back on October 14. The firm issued a Buy rating and a $100 price target, at the time when shares were closer to $85.

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So, who else will initiate research coverage for Alibaba this week? Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley and Citigroup were the joint bookrunners on the deal. Other brokerage firms listed in the U.S. underwriting syndicate, with foreign firms included, were as follows:

  • BOCI
  • CICC
  • CLSA
  • DBS Bank
  • HSBC
  • Mizuho
  • Pacific Crest
  • RBC Capital Markets
  • Stifel
  • Wells Fargo
  • BNP Paribas
  • Evercore
  • Raymond James
  • SunTrust Robinson Humphrey