The outlook for Alibaba has improved in 2023 as China reopens, according to Goldman Sachs. Analyst Ronald Keung added the stock to his conviction buy list, saying Alibaba is the best way to play a rebound in the China internet sector. “We see Alibaba at 11X 2023 adj. P/E as the best value stock proxy to enjoy advertising recovery, fintech (via. 33%-owned Ant) and cloud structural growth, add to CL as we believe the worst is behind us after two years of downward earnings revisions with the largest room for valuation multiple repair amongst the mega-caps as its top line growth resumes and 2022-25E earnings resume to mid-teens growth,” Keung wrote in a Monday note. Shares of Alibaba tumbled 25% in 2022, and roughly 49% in 2021, as China’s stringent Covid policies during the pandemic dampened investor sentiment on the stock. Still, the stock is up more than 21% a little more than a week into 2023, and the analyst expects further upside. He expects the China internet sector will get a lift following easing Covid restrictions, as well as a macro recovery expected in the second quarter. Specifically, Alibaba is expected to have double-digit advertising and commission growth from a rebound in apparel and cosmetics, an easing in the live-streaming shopping format that pressured the company’s Taobao/Tmall platforms during the pandemic, further growth in AliCloud and International, as well as the stock’s attractive valuation, according to the note. “We expect BABA’s market share loss to gradually stabilize, and remain constructive on the company’s ability to expand its total addressable market and drive continuous value-add for merchants/consumers in the long run based on its three strategic pillars,” the analyst said. The firm’s $138 price target, raised from $133, represents more than 28% upside for the stock. Shares are up more than 4% in the premarket Monday. —CNBC’s Michael Bloom contributed to this report.