Please ensure Javascript is enabled for purposes of website accessibility

Why Stock Climbed 10.8% in June

By Keith Noonan – Jul 5, 2020 at 2:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online retailer is benefiting from powerful tailwinds and posting strong performance, and its share price has climbed roughly 74% this year.

What happened

Shares of (JD -0.50%) gained 10.8% in June, according to data from S&P Global Market Intelligence. The Chinese e-commerce stock gained ground following its public listing on the Stock Exchange of Hong Kong (SEHK), encouraging data for the online retail industry, and favorable coverage from analysts.

^SPX Chart

Image source: YCharts.

JD stock rose in conjunction with market momentum early last month, but it got caught in the sell-off that hit the broader market on on June 9 as investors reacted to the increasing number of new coronavirus cases. Shares rebounded in short order thanks to the company's secondary listing on the SEHK, strong performance on a Chinese shopping holiday, and bullish notes from analysts.  

A shopping cart icon on top of a smartphone.

Image source: Getty Images.

So what's stock offering on the SEHK occurred on June 18 and raised roughly $3.87 billion, and the company's share price climbed 3.5% on the day of the listing on the Hong Kong exchange. The secondary offering corresponded with 618 -- a Chinese shopping festival that JS started to commemorate the date of the company's founding and has become very popular. The company recorded total transaction volume of 269.2 billion yuan on the day, up from 201.5 billion yuan on last year's holiday. 

Ronald Keung at Goldman Sachs released a note on JD on June 18, maintaining a "buy" rating on the stock and raising the firm's one-year price target from $59 to $71 per share. Barclays analyst Ross Sandler published a note on stock on June 19, maintaining an "overweight" rating on the company's shares and raising his one-year price target from $59 to $65. 

Now what stock has continued to move higher early in July's trading. The company's share price has climbed 2% in the month so far. 

JD Chart

Image source: YCharts.

JD has a leading position in China's large and fast-growing e-commerce market, and its trusted brand and major infrastructure and order fulfillment advantages should help it capitalize on continued growth for online retail. 

The company has a market capitalization of approximately $95 billion and trades at roughly 47 times this year's expected earnings. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.