Alibaba Group Holding Limited (BABA) currently holds an Average Brokerage Recommendation (ABR) of 1.14 from 22 brokerage firms, indicating an investment sentiment biased towards Strong Buy. Specifically, 20 recommendations are Strong Buy (90.9%) and 1 is Buy (4.6%).
However, despite the favorable ABR, the Zacks Consensus Estimate for Alibaba’s earnings has decreased by 16.6% over the past month to $8.58, leading to a Zacks Rank of #5 (Strong Sell). Analysts’ growing pessimism regarding the company’s earnings prospects signals potential price declines in the near term.
This discrepancy highlights the need for investors to approach the Buy-equivalent ABR with skepticism, as brokerage recommendations may not adequately reflect actual stock performance, especially when they tend to skew towards optimism due to firms’ vested interests.
