What happened
Shares of Alibaba Group Holding (BABA 0.82%) had jumped 2.5% as of 12:30 p.m. ET today. There's going to come a point in time when Wall Street starts to sound like a broken record when talking about Alibaba.
And that time just might be today. Because once again, investors in the Chinese e-commerce giant are being treated to the mixed signals of a Wall Street bank cutting its price target for Alibaba -- and at the same time promising monster profits to anyone who buys the stock.
Image source: Getty Images.
So what
Last week alone, first Benchmark Capital cut its target on Alibaba stock to $235 per share. But with the stock trading for $127 at the time, that actually worked out to a prediction that it would nearly double.
One day later, J.P. Morgan cut its price target on Alibaba to $180 per share, nonetheless predicting that the stock would end the year up 37%.
Also last week, Charlie Munger -- Warren Buffett's partner at Berkshire Hathaway -- doubled his own investment in Alibaba stock. With the shares flying high lately, I suspect that might have something to do with it.
Now what
And now, Citigroup has just joined the Alibaba party.
In a note covered by TheFly.com this morning, Citi argues that Alibaba stock is worth $216 a share. Once again, that's down from the bank's previous price target of $234. Once again, though, it's way, way more than the $131 or so that Alibaba stock costs today.
In support of its astounding claim that Alibaba will gain more than $100, Citi acknowledges the stock's problems. Regardless, it argues that the challenging macroeconomic environment Alibaba faces, softening consumer spending in China, and the lackluster spending on the recent Singles Day shopping holiday in particular don't change the fact that the stock -- at 17.5 times earnings -- looks very cheap.
And the more that bankers keep joining the chorus on that view, the higher Alibaba stock is going to go.
