BUZZ-Street View: Alibaba's re-investment strategies to drive growth

Alibaba's fourth-quarter profit dropped 86% due to valuation changes from equity investments. Analysts expect the company's strategic reinvestment and improving domestic e-commerce market share to drive growth. Shareholder return policies are also predicted to provide downside protection.

** China’s Alibaba Group Holding (9988.HK) on Tuesday reported an 86% plunge in fourth-quarter profit, primarily due to valuation changes from equity investments

** Median PT of 47 brokerages covering its U.S.-listed stock (BABA.N) is $107 - LSEG data

POLICIES TO LIKELY PROVIDE DOWNSIDE PROTECTION

** Citigroup (“buy”, PT: $122) sees initial positive progress, with speed-up of growth led by co’s strategic reinvestment and valuation

** Benchmark (“buy”, PT: $118) says Alibaba is “incrementally more comfortable” for potential turnaround playing out in H2 of FY 2025 along with stabilizing macro backdrop

** J.P.Morgan (“overweight”, PT: $100) says improving domestic e-commerce market share should lead to better monetization eventually

** Goldman Sachs (“buy”) expects significant shareholder return policies to likely provide downside protection

** Zephirin Group (“sell”) believes BABA is showing sense of urgency with upcoming introduction of new monetization tools and AI-driven strategy to grow revenue in FY 2025