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On Friday, Bernstein analysts at SocGen Group adjusted their outlook on JD.com, Inc (NASDAQ:JD), raising the price target to $54.00 from the previous $46.00 while maintaining an Outperform rating. The revision follows JD.com’s robust fourth-quarter earnings, which surpassed both Bernstein’s and consensus estimates. The company reported a revenue of RMB 347 billion, marking a 13.4% increase year over year, which was 7.1% above Bernstein’s projection of RMB 324 billion and 4.4% higher than the consensus of RMB 332 billion. According to InvestingPro data, JD.com is currently trading at an attractive P/E ratio of 11.8x, suggesting potential undervaluation relative to its growth prospects.
The analyst, Robin Zhu, noted the strength of JD.com’s fourth-quarter performance, highlighting the company’s ability to exceed revenue expectations significantly. This performance is reflected in the company’s impressive 88% total return over the past year, as reported by InvestingPro. Zhu addressed investor concerns regarding JD.com being merely a cyclical play, influenced by government trade-in incentives and the electronics and appliance demand cycle. According to Zhu’s analysis, JD.com’s growth trajectory could extend well into the first half of 2025, with expectations of continued double-digit growth before a potential slowdown towards the year’s end.
JD.com’s commentary on its quarterly results has led Bernstein analysts to believe that the company can manage a soft landing despite the anticipated slowdown. The company’s accelerated user growth and the expectation that General Merchandise will continue to drive growth support this view. This optimism is backed by InvestingPro’s analysis, which reveals a GREAT overall financial health score of 3.26 and strong cash flow coverage of interest payments. Subscribers to InvestingPro can access 8 additional key insights and a comprehensive Pro Research Report that provides deep-dive analysis of JD.com’s financial position and growth prospects. Zhu suggested that while the market might adopt a "guilty before proven innocent" stance, JD.com’s current valuation does not fully reflect its potential for sustainable growth.
The analyst’s commentary also touched upon the future, raising the question of whether JD.com’s growth arc could prove durable into 2026. While acknowledging market skepticism, Zhu implied that the company’s performance and strategic positioning could lead to continued success beyond the near term.
JD.com’s strong quarterly results and positive outlook from Bernstein analysts indicate a promising growth path for the e-commerce giant, with the updated price target reflecting confidence in the company’s ability to sustain its upward trajectory.
In other recent news, JD.com has reported impressive fourth-quarter results for 2024, surpassing expectations in both revenue and net profit. The company’s revenue increased by 13.4% year-over-year, with non-GAAP net profit growing by 34% to Rmb11.3 billion. This strong performance was driven by a successful trade-in program and growth in electronics and home appliances. JD.com anticipates high single-digit growth in both revenue and net profit for 2025, setting a positive financial outlook for the year. Analysts have responded to these results with various stock price target adjustments: Benchmark raised its target to $58, Mizuho (NYSE:MFG) to $50, Citi to $56, and Jefferies to $64, all while maintaining positive ratings. The analysts highlighted JD.com’s strategic initiatives, such as expanding in lower-tier markets and considering food delivery services, as key drivers of future growth. Citi also noted the company’s strong performance in the supermarket and fashion sectors. Meanwhile, Citigroup (NYSE:C) strategists have recommended adding JD.com to portfolios, citing the Chinese government’s focus on boosting domestic consumption. These developments underscore JD.com’s robust market position and potential for sustained growth.
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