BofA Securities Affirms 'Buy' Rating on Alibaba Group (BABA) on Food and Delivery Services Growth

Alibaba Group Holding Ltd. (NYSE:BABA) is one of the growth stocks that could double by 2027. On July 11, BofA Securities reiterated a ‘Buy’ rating on the stock but cut its price target to $135 from $145. The adjustment is in response to the Chinese tech giant increasing its investments in food and on-demand delivery services.

Following the investments, Alibaba’s food and on-demand delivery services have experienced significant growth. The orders have increased from 30 million per day to 60 million per day by June, following the launch of Taobao Insta-shopping. The increase has occurred amid a significant rise in traffic on the Taobao App and substantial consumer subsidies.

BofA cut its price target on concerns that losses attributed to the investment have increased to RMB 10 billion. Nevertheless, Alibaba has announced plans to invest RMB 50 billion in food and on-demand delivery, seeking to accelerate growth in this segment.

Alibaba Group Holding Ltd. (NYSE:BABA) is a Chinese multinational company that operates e-commerce platforms, connecting buyers and sellers in various ways. It enables business-to-business (B2B) and business-to-consumer (B2C) transactions and also offers services in digital media, cloud computing, and fintech.

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Disclosure: None. This article is originally published at Insider Monkey.