What happened

Shares of Chinese online discount retailer Vipshop Holdings (NYSE:VIPS) popped on Wednesday, rising as much as 13.5%. By market close, the stock was up 9.6%.

The stock's rise was probably primarily driven by an analyst upgrade for the stock, as the analyst named Vipshop one of his top stock picks.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

KeyBanc analyst Hans Chung gave Vipshop stock an "overweight" rating, up one sector-weight rating. In addition, the analyst gave the stock a $10 12-month price target, representing 41% upside from where the stock finished the trading day on Wednesday. To support his increased bullishness on the stock, Chung cited Vipshop's improving sales.

Vipshop announced higher-than-expected sales in its third quarter. The company's total revenue for the period was up 16.4% year over year. 

Now what

For its fourth quarter, more double-digit sales growth is likely. The company guided for fourth-quarter revenue to rise 8% to 13% year over year.

Check out the latest Vipshop Holdings earnings call transcript.