Mizuho Upgrades JD.com, Sees Significant Pharmacy E-Commerce Opportunity

JD.Com Inc 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 JD.com Analyst

James Lee upgraded JD.com 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 JD.com 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 JD.com 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 JD.com to capture 20% of the online pharmacy market share by fiscal year 2022.

JD Price Action

JD.com 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:

JD.com Trades Higher On Q4 Results, Announces CFO Succession

JD.com Reports Q2 Earnings Beat

Posted In: e-commerceJames LeemizuhoAnalyst ColorNewsUpgradesHealth CarePrice TargetGlobalAnalyst RatingsGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.