Benchmark lowers JD.com stock price target to $47 on food delivery investments

Investing.com - Benchmark lowered its price target on JD.com, Inc (NASDAQ:JD) to $47.00 from $53.00 on Monday, while maintaining a Buy rating on the Chinese e-commerce giant. Trading at a P/E ratio of 8.06, JD.com appears undervalued according to InvestingPro analysis, which offers 12 additional key insights about the company’s valuation and prospects.

The price target reduction reflects significant investments in Food Delivery and Instant Commerce initiatives, which Benchmark expects will result in approximately RMB 10 billion in losses from these segments in the second quarter of 2025.

Despite the near-term margin pressure, Benchmark maintained its forecast for JD.com’s second-quarter GMV and revenue growth at 16% year-over-year, noting that China’s retail sales grew 5.4% and physical goods e-commerce increased 6.3% during the period.

The research firm revised its second-quarter non-GAAP net margin forecast substantially lower to 1.5% from 4.0% previously, and reduced its full-year 2025 group-level non-GAAP net margin estimate to 1.9%, incorporating projected food delivery-related losses of approximately RMB 34 billion.

Benchmark sees strategic value in JD.com’s investments, which aim to drive user growth, create cross-sell opportunities, and modernize supply chains, though it acknowledges uncertainties around long-term return on investment and market share potential.

In other recent news, JD.com reported impressive first-quarter 2025 financial results, surpassing expectations in revenue and net income. The company saw a 17% year-over-year increase in electronics and home appliance sales, alongside a 15% rise in general merchandise sales and a 14% growth in service revenue. This strong performance led JD.com to raise its full-year 2025 guidance for the JD Retail division, anticipating double-digit growth in both revenue and net profit. Meanwhile, China’s market regulator summoned JD.com, along with other major food delivery companies, to discuss competition practices and improve the regulation of promotional activities in the industry. UBS revised its price target for JD.com to $50, maintaining a Buy rating, due to increased investments in food delivery. Susquehanna also adjusted its price target to $40, retaining a Neutral rating, citing macroeconomic uncertainties despite JD.com’s strong first-quarter results. Benchmark analysts lowered their price target to $53 while upholding a Buy rating, acknowledging JD.com’s robust financial performance and positive outlook. Additionally, data indicated increased investments in JD.com by foreign passive funds, reflecting a strategic shift in global fund allocations toward Chinese equities.

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