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Mizuho Upgrades, Sees Significant Pharmacy E-Commerce Opportunity

Mizuho Upgrades, Sees Significant Pharmacy E-Commerce Opportunity

JD.Com Inc (NASDAQ: JD) shares were trading higher Wednesday after Mizuho Securities upgraded the company's stock due to "significant opportunities in online sales" as more people turn to retail pharmacy.

The Analyst

James Lee upgraded from Neutral to Buy and raised its price target from $37 to $58 based on significant opportunities in online pharmacy triggered by the COVID-19 pandemic.

The Thesis

The deregulation and government reform of retail pharmacy will push medicine sales from hospitals or clinics to retail stores, presenting a significant opportunity for online sales, Lee said in a Tuesday upgrade note. (See his track record here.)

“Due to regulatory tailwinds, we believe that online retail pharmacy penetration will increase from estimated 5% now to 20% in five years, delivering a market size of nearly RMB 500billion,” the analyst said. 

Another major factor is the recent lockdowns triggered by the coronavirus pandemic, as consumers have been forced to adjust their behavior toward online shopping, he said. 

“We believe is well positioned because it offers tele-medicine for prescriptions, guarantees to reduce the risks of fake products, and logistics services to ensure timely delivery.”

Lee said he expects to capture 20% of the online pharmacy market share by fiscal year 2022.

JD Price Action was trading 1.35% higher at $47.66 at the time of publication Wednesday. The stock has a 52-week high of $49.13 and a 52-week low of $25.48.

Related Links: Trades Higher On Q4 Results, Announces CFO Succession Reports Q2 Earnings Beat

Latest Ratings for JD

Apr 2021HSBCMaintainsBuy
Mar 2021HSBCMaintainsBuy
Jan 2021BernsteinInitiates Coverage OnOutperform

View More Analyst Ratings for JD
View the Latest Analyst Ratings


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