JD.com's Fundamental Turnaround: A Tale of Mixed Analyst Opinions and Rising Price Targets

Benchmark analyst Fawne Jiang maintains JD.Com, Inc JD with a Buy, raising the price target from $68 to $72.
JD reported 1Q23 results with revenue moderately ahead and earnings well above consensus expectations.
The company guided adjusted net margin expansion in 2Q23 and net profit to grow at a double-digit rate Y/Y for FY23, exceeding its consensus expectations.
The analyst boosted its FY23 and FY24 earnings estimates due to encouragement by the early signs of a fundamental turnaround in the making, evidenced by healthy user growth, solid merchant base expansion, and an improving GMV trend with notable strength in the 3P marketplace.
He is incrementally positive on several leading indicators like double-digit growth DAU of JD's main app, growth pressure at 3C & home appliance pressure due to macro, JD's market share win in these categories thanks to its omnichannel offering, improving GMV trend driven by outperformance of 3P market place.
While the company is still not out of the woods, he believes a reacceleration of GMV growth could alleviate market concerns that JD is losing market share amidst increasing competition, ultimately leading to a re-rating of the stock.
Loop Capital analyst Rob Sanderson reiterated a Hold and bumped the price target from $40 to $42.
JD reported relatively in-line 1Q results with weakness in general merchandise sales offset by CE and appliances, advertising, and logistics services.
The company delivered a better bottom line on gross margin (services mix) and spending discipline. Management said on the call that consumption trends have progressively strengthened through April and into May, lifting the stock and driving its peers even higher.
The analyst raised estimates on better profitability. He expects the stock will not outperform until headwinds cycle through and growth normalizes.
Price Action: JD shares traded lower by 5.71% at $35.48 on the last check Friday.
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