CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lift our 12-month target to USD184 from USD163, on a P/E of about 15x (unchanged) our FY 28 (Mar.) EPS of USD12.26 (based on current FX), which is within its long-term range. We trim our FY 27 EPS to CNY53.65 from CNY 56.81 but raise FY 28 to CNY83.23 from CNY74.64. We expect cloud revenue growth to accelerate from roughly 40% in the latest quarter to 47% in FY 27, fueled by AI-related revenue, which currently accounts for about 30% of the cloud business and should rise to 50% within the next year. We also expect BABA to see a meaningful profit inflection over the next several years as losses in quick commerce narrow substantially and AI-related investments become increasingly monetized. Cloud margins were just 9% this past fiscal year but should improve materially over the coming quarters, particularly as the high-margin MaaS (model-as-a-service) business scales. We continue to view BABA shares as the most compelling way to gain exposure to the AI theme in China.