UPDATE: Deutsche Bank Raises PT on AutoNavi on Alibaba Investment

In a report published Wednesday, Deutsche Bank analyst Vivian Hao raised the price target from $13.40 to $15.10 on AutoNavi (NASDAQ: AMAP) and maintained a Buy rating.

In the report, Deutsche Bank stated, "AMAP is undoubtedly a leading player and an attractive acquisition target (please refer to our 1 March note) as an independent mapping service provider. Alibaba will take 28% of AMAP shares (post-money) for $294m ($15.4/ADS and 35x, and 16x ex-cash, FY13E DBe PER), a ~14% premium to the last close of $13.3 (30x FY13E PER) on 10 May but a 40+% premium to the pre-rally average price of $11 YTD. Also, the net cash/current market cap has risen to ~44% from ~19% for AMAP. The deal is set to close by next month. We believe the market discount may be the result of: 1) event-driven trades taking profit at strike intra-day, as the deal is structured as equity investment instead of acquisition/privatization, 2) lackluster 1Q13 results (despite weak seasonality) and rising cost pressure setting the tone for this year's earnings outlook. After dilution, Alibaba Group will emerge as the largest shareholder of AMAP with a 28% stake, with Chairman, Jun Hou, diluted to 12% from 17% and CEO, Cheng Congwu, diluted to 8% from 11%."

AutoNavi currently trades at $12.40.