Hong Kong-listed JD.com, Inc. (HK:9618) has earned a bullish response from analysts after the retail giant reported robust second-quarter results last week. JD.com stock received four ratings from analysts, including three Buy recommendations. The company’s steady performance in a competitive market was well-received by investors, resulting in a nearly 9% surge in the stock on Friday. Shares continued to rise and closed 4% higher today.
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JD.com is a leading e-commerce platform in China that offers an extensive range of products such as electronics, home appliances, and groceries.
JD.com Delivers Upbeat Q2 Performance
JD.com posted net revenues of ¥291.4 billion in Q2 2024, marking 1.2% growth from the previous year and closely matching analysts’ consensus estimate of ¥291.47 billion.
Despite a modest growth in revenues, net income attributable to the company’s ordinary shareholders surged 92.1% year-over-year to ¥12.6 billion in Q2 2024. This growth was driven by improved operational efficiencies, which enabled the company to navigate increasing competition in the domestic e-commerce market.
Additionally, JD.com’s Q2 income from operations rose to ¥10.5 billion from ¥8.3 billion a year ago. This increase reflects the company’s enhanced gross margin, which improved by 137 basis points to 15.8%.
Analysts React Positively to JD.com’s Q2 Results
Following the results, analysts from Jefferies, Macquarie, and DBS confirmed their Buy ratings on JD.com stock, predicting more upside. Meanwhile, Bernstein stuck to its Hold rating on the stock with a forecast of 15.5% upside.
Among these analysts, Sachin Mittal from DBS predicts an upside of 35% on the share price. He stated that his Buy rating is driven by the company’s strong market presence and solid logistics infrastructure. He added that JD.com’s advanced logistics network of 1,300 warehouses boosts customer service and supply chain efficiency. Mittal also believes that the company’s expansion into groceries and healthcare, along with steady revenue growth, supports his bullish stance.
Moving ahead, Mittal expects the company to deliver adjusted earnings CAGR (compound annual growth rate) of 6% for the next three years. Furthermore, the company’s valuation features a compelling total dividend and share buyback yield of approximately 6%. This makes the stock’s current price an attractive buying opportunity for investors, according to the analyst.
Is JD Stock a Good Buy Now?
As per the consensus among analysts on TipRanks, 9618 stock has been assigned a Strong Buy rating based on six Buy and two Hold recommendations. The JD.com share price target is HK$152, which implies an upside of 40.5% from the current price level.
