Alibaba Is Dropping. Why Wall Street Suddenly Loves the Stock.

By Brian

Chinese internet retailer Alibaba has fallen considerably less than the S&P 500 this year.

Alibaba($Alibaba(BABA)$ )stock was falling Wednesday even as Wall Street analysts raised earnings estimates for the Chineseonline retailer.

Benchmark analysts led by Fawne Jiang raised their target price for the stock to $205 from the current level of around $120. “We see upside potential for earnings,” the analysts wrote in a note dated June 6, and they raised their estimates for revenue.

Citigroup on Monday increased its profit forecasts for the company, arguing that the worst stretch for the company is probably behind it and that it should correlate with China’s recovery in the second half.

The stock gained 1.6% Wednesday on the Hong Kong exchange but has fallen 3.2% in U.S. trading. The stock climbed more than 3% on Tuesday and is now more than 50% higher than its trough in March.

Alibaba remains 4% lower than at the start of the year. But in the first six months, theS&P 500SPX+0.36% slipped into a bear market and the technology-heavy Nasdaq COMP+0.35% lost almost 30%.

Resource: Barrons