Alibaba (BABA, Financial) saw its U.S. stock rise by 3.58% in pre-market trading, positioning it to potentially reach a new high. The company is set to announce its earnings soon. UBS has released a preview report for Alibaba's fiscal third quarter of 2025, projecting revenues of RMB 274.557 billion, which represents a year-on-year increase of 5.5% and a quarter-on-quarter rise of 16.1%. However, this forecast is slightly below the market consensus of RMB 278.779 billion.
The report highlights that if the macroeconomic environment stabilizes and competitive conditions improve, there could be potential for an upward revision of Alibaba's valuation multiples. UBS has assigned a "buy" rating to Alibaba, with a target price of $140 for its U.S. shares, which translates to HKD 136 for its Hong Kong shares. This target price implies a price-to-earnings ratio of 18 times for the fiscal year 2026.
