Susquehanna lowers JD.com stock price target to $32 on margin pressure

Investing.com - Susquehanna has reduced its price target on JD.com stock (NASDAQ:JD) to $32.00 from $40.00 while maintaining a Neutral rating on the Chinese e-commerce giant. The stock, currently trading at $31.70, shows attractive valuations with a P/E ratio of 8.9x and maintains a strong balance sheet with more cash than debt.

The firm acknowledged that JD.com reported accelerating growth in the second quarter, driven by strong consumer demand and scaling of new business lines, particularly in food delivery services.

Despite the growth acceleration, Susquehanna noted that investments in the delivery business and other areas negatively impacted the company’s profit margins during the quarter.

The research firm continues to view JD.com as "solidly positioned in the large Chinese e-commerce market" but cited persistent macroeconomic uncertainty in China as a concern for the near term.

These ongoing economic challenges in the Chinese market, combined with margin pressure from new business investments, led Susquehanna to maintain its Neutral stance while lowering its price expectations for JD.com shares.

In other recent news, JD.com has made significant strides in its business activities. The company is in the process of acquiring Ceconomy, with JD.com’s subsidiary, JINGDONG HOLDING GERMANY GMBH, announcing a takeover offer at €4.60 per share. This move is part of a broader investment agreement aimed at enhancing cooperation between the two companies post-acquisition. On the financial front, JD.com has been facing some challenges, as noted by CFRA, which lowered its price target to $36 due to increased spending in its food delivery segment. CFRA also adjusted its earnings forecasts for 2025 and 2026, reflecting this increased investment. Meanwhile, Mizuho (NYSE:MFG) also adjusted its price target for JD.com to $40, citing concerns over margin pressures. Despite these concerns, Mizuho maintained an Outperform rating, highlighting positive developments in JD.com’s core retail business, including revenue acceleration and margin expansion. These recent developments underscore JD.com’s strategic maneuvers and financial adjustments in a competitive market environment.

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