Erste Group Bank Forecasts Higher Earnings for Alibaba Group

Key Points

• Erste Group Bank raised Alibaba’s FY2028 EPS forecast slightly to $8.42 from $8.41, above the current full-year consensus estimate of $5.89.
• Alibaba’s latest quarter showed revenue of $39.64 billion, up 8.6% year over year and slightly ahead of estimates, but EPS of $1.26 missed consensus by $0.68.
• Analysts remain broadly positive, with a consensus “Moderate Buy” rating and average price target of $182.89, though concerns persist over AI-related spending, cash outflows and near-term profitability.

Alibaba Group Holding Limited (NYSE:BABA - Free Report) - Erste Group Bank upped their FY2028 earnings estimates for shares of Alibaba Group in a research note issued on Thursday, October 8th. Erste Group Bank analyst S. Lingnau now anticipates that the specialty retailer will earn $8.42 per share for the year, up from their prior forecast of $8.41. The consensus estimate for Alibaba Group's current full-year earnings is $5.89 per share.

Alibaba Group (NYSE:BABA - Get Free Report) last released its earnings results on Friday, August 14th. The specialty retailer reported $1.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.94 by ($0.68). Alibaba Group had a return on equity of 4.79% and a net margin of 7.00%. The company had revenue of $39.64 billion during the quarter, compared to analyst estimates of $39.52 billion. During the same period in the prior year, the business posted $14.75 earnings per share. Alibaba Group's revenue was up 8.6% on a year-over-year basis.

A number of other equities analysts have also weighed in on the stock. Citigroup lifted their price target on shares of Alibaba Group from $190.00 to $193.00 and gave the company a "buy" rating in a report on Thursday. Nomura cut their target price on Alibaba Group from $207.00 to $178.00 and set a "buy" rating on the stock in a research report on Thursday, June 25th. Robert W. Baird cut their target price on Alibaba Group from $164.00 to $160.00 and set an "outperform" rating on the stock in a research report on Friday, August 21st. Jefferies Financial Group reiterated a "buy" rating and issued a $192.00 target price on shares of Alibaba Group in a report on Thursday. Finally, Susquehanna boosted their price target on Alibaba Group from $185.00 to $190.00 and gave the company a "positive" rating in a research report on Friday, August 28th. Two equities research analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating and six have given a Hold rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $182.89.

Alibaba Group Stock Performance

Shares of BABA stock opened at $110.64 on Tuesday. The company has a debt-to-equity ratio of 0.21, a quick ratio of 1.36 and a current ratio of 1.36. The firm has a market capitalization of $275.24 billion, a price-to-earnings ratio of 26.79, a price-to-earnings-growth ratio of 1.47 and a beta of 0.47. Alibaba Group has a one year low of $91.99 and a one year high of $182.50. The company has a 50 day moving average price of $115.76 and a 200 day moving average price of $119.44.

Institutional Trading of Alibaba Group

A number of institutional investors have recently added to or reduced their stakes in BABA. AMF Tjanstepension AB raised its position in Alibaba Group by 4.1% in the first quarter. AMF Tjanstepension AB now owns 2,206,634 shares of the specialty retailer's stock valued at $276,844,000 after purchasing an additional 86,613 shares during the period. Altshuler Shaham Ltd purchased a new stake in shares of Alibaba Group in the fourth quarter worth about $160,410,000. Bamco Inc. NY boosted its position in shares of Alibaba Group by 6.8% in the fourth quarter. Bamco Inc. NY now owns 1,071,647 shares of the specialty retailer's stock worth $157,082,000 after buying an additional 67,948 shares during the period. Bbfit Investments PTE Ltd. acquired a new stake in shares of Alibaba Group in the fourth quarter valued at about $106,828,000. Finally, Thornburg Investment Management Inc. grew its stake in shares of Alibaba Group by 5.5% in the fourth quarter. Thornburg Investment Management Inc. now owns 584,028 shares of the specialty retailer's stock valued at $85,607,000 after buying an additional 30,644 shares in the last quarter. 13.47% of the stock is owned by hedge funds and other institutional investors.

Insider Activity

In other Alibaba Group news, CFO Hong Xu sold 103,046 shares of the business's stock in a transaction that occurred on Friday, September 25th. The shares were sold at an average price of $13.68, for a total transaction of $1,409,669.28. Following the completion of the sale, the chief financial officer directly owned 406,450 shares in the company, valued at $5,560,236. The trade was a 20.23% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Joseph Tsai acquired 720,000 shares of the firm's stock in a transaction on Monday, August 24th. The shares were acquired at an average price of $14.29 per share, with a total value of $10,288,800.00. Following the completion of the purchase, the director owned 114,979,168 shares of the company's stock, valued at $1,643,052,310.72. This trade represents a 0.63% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders sold a total of 999,971 shares of company stock valued at $13,563,304 over the last quarter. 12.50% of the stock is owned by insiders.

Alibaba Group News Summary

Here are the key news stories impacting Alibaba Group this week:

• Positive Sentiment: Alibaba unveiled a new generation of approximately $450 AI glasses, expanding its consumer-electronics lineup and providing a potential new way to monetize its artificial-intelligence capabilities. The launch reinforces management’s strategy of integrating AI across hardware, cloud services and e-commerce. Alibaba Unveils $450 AI Glasses in Expanding Push Into Gadgets
• Positive Sentiment: Jefferies maintained a Buy rating and named Alibaba its top China internet-sector pick, citing solid execution across business segments and accelerating AI-cloud growth. The firm sees substantial upside from current levels, while JPMorgan retained an Overweight rating despite reducing its price target to $200. Alibaba Has Lost 41% in a Year: Jefferies Sees 79% Upside
• Positive Sentiment: Alibaba is expanding AI-cloud capacity in Europe, including new AI-focused regions and planned Spanish data-center projects. Partnerships involving Sands China’s robotic guides and the Brooklyn Nets’ sports-fan technology also illustrate potential real-world applications for Alibaba’s cloud and AI platforms. Alibaba Is Building New AI Cloud Regions In Europe
• Neutral Sentiment: Erste Group slightly raised its FY2028 EPS forecast to $8.42 from $8.41. The increase is supportive but modest compared with the broader consensus estimate of $5.89 for the current fiscal year.
• Negative Sentiment: Alibaba’s aggressive AI-capital-spending program is creating concerns about near-term cash outflows, profitability and whether management can achieve its targeted three-year payback period. Reports also highlighted RMB44.7 billion of free-cash-flow outflow in the June quarter, increasing scrutiny of investment discipline.
• Negative Sentiment: JPMorgan’s price-target reduction, although still accompanied by an Overweight rating and substantial implied upside, signals that execution or valuation risks remain. Alibaba also previously missed quarterly EPS expectations, adding to investor caution.

About Alibaba Group

Alibaba Group Holding Limited is a technology and commerce company founded in 1999 and headquartered in Hangzhou, China. It operates a broad digital ecosystem connecting consumers, merchants, brands and businesses through online marketplaces and related services.

The company's China commerce businesses include Taobao and Tmall, while its international commerce operations include Alibaba.com, AliExpress, Lazada and Trendyol. Alibaba also provides logistics services through Cainiao, consumer services through platforms such as Ele.me and Freshippo, and digital media and entertainment offerings.

Alibaba Cloud provides cloud computing, data management, artificial intelligence and other technology services to businesses and organizations.

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