Brean Capital Sees 24% Upside In Alibaba Shares

Fawne Jiang raised Alibaba Group Holding Ltd's (NYSE: BABA) price target from $100 to $115 while maintaining the company's Buy rating. The analyst was impressed with Alibaba's stronger than expected earnings report on Thursday.

"Going forward, we expect BABA's core ecommerce business to remain solid with high and sustainable margin outlook driven by" multiple initiatives.

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First among the drivers behind Jiang's forecasted upside was Alibaba's improving monetization trend as the company has built and continuously improved a platform where merchants and consumers could "sealingly engage." The initiative should "help to drive user engagement through social ecommerce transformations and command higher pricing with broadened value propositions to merchants, " stated Jiang.

Increasing Mobile Traffic

Additionally, Alibaba's mobile transition including "increasing upward trends for both mobile traffic and mobile monetization," according to the Brean analyst.

'Reshaping' of Chinese Shopping Behavior

Finally, the analyst believed the "reshaping" of Chinese consumer shopping behavior through community, social and personalization leveraging big data technology would play a part in AliBaba's future upside according to Jiang. "Particularly, we are encouraged to see accelerated growth of BABA's cloud business with narrowing operating loss, which could emerge as the next growth engine for BABA," stated the analyst.

According to TipRanks, Jiang has a 59 percent success rate and a +7.1 percent average return per recommendation. The analyst is ranked 285 out of 4110 analysts.

At time of writing, Alibaba traded at $95.75, up 4.34 percent Friday.