Citi views the news regarding Walmart (WMT) exiting its 9.4% stake in JD.com (JD) as a surprise. The over 10% share price decline likely have reflected the unexpected news, the analyst tells investors in a research note. Walmart’s statement to Reuters seems to imply the company remains committed to retain its strategic partnership with JD.com and implied it plans to redeploy the capital towards its “priorities,” says Citi. While the firm believes Walmart will still rely on JD Now for its on-demand delivery service, it says the partnership and competitor relationship persist as the product categories offered by Walmart and Sam’s Club are competing with JD Retail’s general merchandise category. Citi believes JD’s share price could be range bound near-term. It keeps a Buy rating on the shares with a $41 price target.
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