Alibaba Group Holding Ltd.'s stock gained 0.5% in premarket trade after the Chinese e-commerce giant was upgraded at Stifel Nicolaus, which said regulatory risks surrounding counterfeit items appear to have subsided. Analyst Scott Devitt raised his rating to buy from hold, added the stock to the Stifel Select List and set a new $99 price target, which is 18% above Monday's closing price of $84. Devitt doesn't believe the number of inauthentic merchandise on Alibaba or the Chinese government's focus on the issue has changed since a white paper by regulators alleged that a significant percentage of products sold on its Taobao platform were fakes. "What has changed, in our view, is that the headline risk has been defused as Alibaba has strengthened measures against counterfeit goods and the white paper has been removed," Devitt wrote in a note to clients. He also believes monetization investments the company made, that hurt third-quarter results, will begin to pay off. The stock has tumbled 19% year to date, while the S&P 500 has gained 1.1%.
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