What to Expect When Alibaba Reports Friday Morning

Alibaba Group Holding Ltd. (NYSE: BABA) is scheduled to report its most recent quarterly results before the markets open on Friday. Analysts on average expect to see $0.87 in earnings per share (EPS) and $15.2 billion in revenue. The fiscal first quarter of last year reportedly had $1.25 in EPS and $13.59 billion in revenue.

Argus recently rated Alibaba as Buy and raised its price target to $260 from $210, implying an upside of 17% from the most recent closing price of $222.14.

The independent research firm was quick to note that Alibaba is assuming “responsibilities and duties” toward the affected community while providing relief measures to support small and medium enterprises. Alibaba is seeing opportunities created by the “force of change.” With restaurants and businesses remaining closed, Alibaba’s Freshippo (online food delivery) and other delivery platforms have seen a surge in business.

Alibaba posted a strong overall calendar 2019, highlighted by its biggest-ever Single’s Day in November. The CEO, Daniel Zhang, offered interesting perspectives on China overall and growth in its consumption economy. Consumption contributed 58% of China’s economic growth and accounted for 3.5 percentage points to China’s 2019 GDP growth, which was in the 6% range.

China’s retail sales overall grew 8% in 2019. Alibaba’s revenue grew about 50% last year, signaling that the company continues to grow market share within the Chinese consumer economy.

Excluding Thursday’s move, Alibaba stock has outperformed the S&P 500 and Dow Jones industrial average with a 2% gain year to date. In the past 52 weeks, the share price is closer to 33% higher.

A few other analysts weighed in on Alibaba ahead of the report:

  • Raymond James rates it a Strong Buy with a $290 target.
  • RBC has a Buy rating and a $230 target price.
  • CLSA has a Buy rating with a $270 price target.
  • Baird has a Buy rating with a $230 price target.
  • UBS’s Buy rating comes with a $260 price target.

Alibaba stock traded down about 2% to $212.24 on Thursday, in a 52-week range of $147.95 to $231.14. The consensus price target is $256.50.