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Is a $67 Stock?

By Howard Smith - May 19, 2020 at 4:33PM

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After strong earnings, several analysts raise price targets with buy ratings for the Chinese e-commerce company.

China's largest online retailer, (JD -4.59%), reported its first-quarter 2020 earnings last week, and investors liked what they saw, sending the stock to new highs. The company reported year-over-year revenue growth of 21% as the company stayed operational, serving consumers throughout the COVID-19 crisis. 

On the heels of the strong quarterly report, several analysts have raised price targets for JD, including UBS analyst Jerry Liu, who raised his price target to $67 and wrote, "JD's consistent execution and post COVID-19 traction with consumers give us more conviction in the company's near to medium term revenue growth and margin expansion," according to Benzinga. 

Three smartphone images that display purchasing, shipping, and receiving an item.

Image source: Getty Images.

Several other analysts also responded to the earnings results with increased price targets, ranging from $50 to $62 per share. Stifel analyst Scott Devitt, who raised his price target to $50 -- with shares trading above that level -- maintained a neutral rating. Devitt still believes the company will continue to gain market share in China's $1 trillion e-commerce market. He said, "JD will continue to benefit from the accelerated shift in eCommerce adoption and expect a recovery in discretionary categories as conditions normalize," according to the report. 

Liu believes that even as consumers emerge from COVID-19 lockdowns, JD will continue increasing sales, and will do so while reigning in expenses, with increasing margins. The company's guidance of second-quarter net revenue growth between 20% and 30% versus last year supports analyst optimism. 

Besides retail, JD's segments include health, which provides pharmaceutical and healthcare products and services; logistics, offering home delivery service; and property, consisting of investments managed by a property management group. 

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