The analyst rating from JP Morgan for Alibaba (BABA-W) is based on the observation that the market is undervaluing the stock by pricing it primarily on its domestic e-commerce earnings, while overlooking the potential value of Alibaba Cloud and quick commerce platforms. Despite a forecasted domestic e-commerce profit of approximately RMB196 billion for FY27, the report highlights that the significant growth in Alibaba Cloud's revenue, particularly driven by AI products, is not being reflected in the stock's valuation. Consequently, JP Morgan has adjusted its revenue and earnings forecasts downward but maintained an Overweight rating, indicating a belief in the stock's potential despite the recent adjustments.
