Buy Alibaba stock for a 62% return in 12 months: Morgan Stanley

Alibaba Group Holding Ltd (NYSE: BABA) has been rather dull for its shareholders this year but a Morgan Stanley analyst recommends keeping patient for just a bit longer.

Alibaba stock has upside to $150

On Monday, Gary Yu maintained his “buy” rating on the Chinese tech behemoth. His $150 price target on it suggests about a 62% upside from here.

The analyst is bullish on Alibaba stock primarily because the management announced a structural overhaul in late March as Invezz reported here. His research note reads:

The latest restructuring progress and faster-than-expected pace of capital management are encouraging.

In its latest reported quarter, the multinational noted only a 2.0% increase in its revenue on a year-over-year basis. Alibaba stock is currently trading at roughly the same price at which it started 2023.

Alibaba to separately list its cloud business

Yu is bullish on Asian stocks at large but named Alibaba Group Holding Ltd, in particular, the top pick for exposure to China’s internet space.  

In May, the Hangzhou-headquartered firm announced plans of listing its Cloud Intelligence Group separately after its board authorised a full spin-off of that business. The Morgan Stanley analyst wrote:

Full cloud spinoff and step-up in pace of share repurchase imply a 30% return to shareholders.

Last week, the Chinese tech giant said it was about to launch Tmall in Spain and eventually through the rest of Europe as part of its international push. Other than Alibaba stock, Yu is bullish on JD.com as well.