Bank of America is bullish on Alibaba Group Holding Limited (NYSE:BABA) and expects a 6% spike in year-over-year revenue when the Chinese e-commerce company reports first-quarter earnings Thursday.
The expected a 6% increase in revenue to 248 billion yuan is in line with analyst consensus.
Analyst Joyce Ju said Alibaba's customer management revenue in the Chinese market is expected to rise 2.3% to 81.5 billion yuan ($114 billion). Gross merchandise value is forecasted to rise by a single-digit percentage after Alibaba overhauled its Taobao e-commerce platform in an initiative carried out by Taobao and Tmall, Alibaba's domestic e-commerce unit, the analyst said.
"We believe TT managed to slightly outgrow the industry as physical online goods sales reported by NBS was only 6.4% in 2Q24," she wrote in a note.
Ju reiterated an Outperform rating on Alibaba and raised the price target from $103 to $106.
Alibaba revamped its webpage earlier this year in its most significant update in seven years to improve the shopping experience ahead of China's major 618 shopping festival in late May.
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The upgrade focused on streamlining the layout and simplifying the search and buying process for users and merchants.
Alibaba's full-year revenue is expected to grow to 125 billion yuan by 2025, according to BofA.
BABA Price Action: Shares of Alibaba were down 1.8% to $79.60 at the time of publication Wednesday.
This decline was mirrored across several related ETFs:
- Invesco Golden Dragon China ETFProShares Online Retail ETF (NASDAQ:PGJ) fell 1.91%.
- ProShares Online Retail ETF (NYSE:ONLN) slipped 0.24%.
- Global X E-commerce ETF (NASDAQ:EBIZ) decreased 1.09%.
- ProShares Long Online/Short Stores ETF (NYSE:CLIX) dropped 0.65%.
- Matthews Pacific Tiger Active ETF (NYSE:ASIA) slid 0.85%.
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Photo courtesy Alibaba.