Alibaba Group Holding Ltd (NYSE:BABA) seems to be spreading their wings considerably over the last twelve months. This strategy continues to be the case as the company today has reportedly entered into an agreement to invest a staggering $1.25 billion in the Chinese food delivery application Ele.me. This investment is reported to provide Alibaba Group Holding Ltd (NYSE:BABA) with a 27.5% stake in the company, valuing Ele.me at approximately $4.54 billion.
This move will likely strengthen Alibaba’s position as they compete against the Chinese search gaint, Baidu, in the online-to-offline commerce space. Neither Alibaba or Ele.me have offereed to comment on this expected investment. The stock is down 1.65% or $1.38 following the news, hitting $82.33 per share. Approximately 6.71 million shares traded hands. BABA shares have declined 10.25% since May 22, 2015 and are currently downtrending. It has underperformed the S&P500 by 7.19%.
From a total of 23 analysts covering Alibaba (NYSE:BABA) stock, 21 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 91% of the ratings are positive. The highest target price is $137 while the lowest target price is $80. The mean of all analyst targets is $93.92 which is 14.08% above today’s ($82.33) stock price. Alibaba was the topic of 50 analyst reports since August 12, 2015 according to the firm StockzIntelligence Inc. M Partners maintained shares on October 30 with a “Buy” rating. Axiom Capital maintained shares with a”Buy” rating and a $92 target share price in their report from an October 28. Oppenheimer maintained BABA stock in a recent report from October 28 with a “Outperform” rating. Brean Capital maintained the rating on October 28. Brean Capital has a “Buy” rating and a $98 price target on shares. Finally, Wedbush maintained the stock with a “Neutral” rating in a report they issued on an October 28.
Alibaba Group Holding Limited is a holding company. The company has a market cap of $210.89 billion. The Firm is principally engaged in online and mobile commerce through products, services and technology. It has 22.03 P/E ratio. The Firm provides retail and wholesale marketplaces available through both personal computer and mobile interfaces in the PRC and internationally.