Jefferies maintains a 'compelling buy' rating on Alibaba Group Holding Limited (BABA), setting a 2026 price target that reflects robust confidence in the company’s long-term trajectory. The firm highlights improving fundamentals, expanding cloud revenue, and underappreciated asset value as key drivers.
- Jefferies maintains a 'compelling buy' rating on BABA with a 2026 price target implying significant upside.
- Projected 18% CAGR in core commerce revenue over 2023–2026, driven by user growth and market share gains.
- Alibaba Cloud expected to exceed $25 billion in annual revenue by 2026, with over 20% CAGR and improving margins.
- Current enterprise value of ~$210 billion, viewed as undervalued relative to asset base and growth potential.
- Strong cash reserves and strategic assets, including stakes in Ant Group, support long-term value creation.
Jefferies reaffirms its 'compelling buy' rating on Alibaba Group Holding Limited (BABA), projecting a 2026 target price that implies significant upside from current levels. The firm underscores Alibaba’s structural advantages across e-commerce, digital infrastructure, and cloud services, positioning the company for sustained growth amid a complex macroeconomic backdrop. The research team cites a projected compound annual growth rate (CAGR) of 18% in Alibaba’s core commerce revenue over the next three years, driven by expanding user engagement and market share gains in China’s competitive retail landscape. Additionally, Alibaba Cloud is forecast to achieve a revenue run-rate exceeding $25 billion by 2026, representing a CAGR of over 20%, with improving profitability as cost optimization efforts take hold. Jefferies also highlights the company’s asset-light model and substantial cash reserves, which support both strategic investments and shareholder returns. With a current enterprise value of approximately $210 billion, the firm argues that BABA trades at a significant discount relative to its intrinsic value, particularly when accounting for its stake in Ant Group and other undervalued technology assets. The rating upgrade carries notable weight in institutional circles, influencing allocation decisions among long-term equity investors and ETF managers. Market participants are closely monitoring China’s regulatory environment and consumer sentiment, but Jefferies believes Alibaba’s diversified business model and leadership in digital infrastructure provide a durable competitive moat.