JPMorgan's latest report indicates that concerns surrounding JD.com (JD, Financial) have been eased by its Q4 2024 results and FY 2025 guidance. The bank anticipates sustained strong demand for electronics and appliances, driven by JD.com's "trade-in" policy, lasting through Q1 2025. The company's revenue from general merchandise and marketing is expected to maintain rapid growth, supporting overall revenue and profit growth in the second half of FY 2025, despite a high comparison base in the appliance sector.
JPMorgan also notes that JD.com's profit margins are likely to continue improving due to disciplined investment strategies, even as the company pursues new investment goals. The bank projects JD.com's revenue and profit to achieve double-digit year-on-year growth in Q1 2025. Furthermore, even with a high comparison base predicted by JPMorgan in Q4 2025, JD.com is expected to maintain positive growth.
Given these positive outlooks, JPMorgan sees potential for JD.com's forward P/E ratio of 9 to increase, primarily driven by upward revisions in market profit forecasts. The bank reaffirms its "Overweight" rating for JD.com, raising the U.S. stock price target from $50 to $55 and the Hong Kong stock price target from HKD 200 to HKD 215.
