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Stifel Upgrades JD.Com On Growth, Margin Expansion Prospects

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Stifel Upgrades JD.Com On Growth, Margin Expansion Prospects

JD.com (NASDAQ: JD) continues to be a leading e-commerce platform in China and has several “secular growth trends to support healthy long-term growth and ongoing margin expansion,” according to Stifel.

The JD.com Analyst: Scott Devitt upgraded JD.com from Hold to Buy and raised the price target from $84 to $105.

The JD.com Thesis: The company has several levers to drive margin expansion over the next several years, Devitt said in the upgrade note.

“JD’s fulfilled gross margin will continue to benefit from economies of scale in its 1P and logistics businesses, as well as growth in higher-margin advertising services,” the analyst said.

iResearch projects China’s online retail will grow at a compounded annual rate of 10% from 2020 to 2023, he said.

“Our forecasts imply Net Product Revenues CAGR of 17% from 2020-’23E and Net Services Revenue CAGR of 27% over the same period.” 

JD.com has the “opportunity to monetize investment stakes in newer businesses, which should be additive to the company’s equity value as valuation events occur,” according to Stifel. 

JD Price Action: JD.com shares were trading 10.3% higher to $95.22 at last check Tuesday. 

Latest Ratings for JD

DateFirmActionFromTo
Jan 2021BernsteinInitiates Coverage OnOutperform
Jan 2021StifelUpgradesHoldBuy
Jun 2020MizuhoMaintainsBuy

View More Analyst Ratings for JD
View the Latest Analyst Ratings

 

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