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JD.com Stock Has Fallen Over 11% in May


May. 9 2019, Published 2:47 p.m. ET

Stock fell this week after a stellar run in 2019

JD.com (JD) has declined 10.5% this week. Since the start of May, JD.com is down 11.2%. Last year, JD.com fell close to 52% on trade war concerns coupled with management issues. JD.com stock had an impressive start to 2019 and is up 28.5% despite the recent weakness.

JD.com stock is also expected to be volatile in the short term due to the ongoing trade war. According to a Bloomberg report, a $200 billion increase of tariffs on China’s products would result in a 0.5 percentage-point decrease for the country’s GDP. A fall in GDP would directly impact consumer spending and hit the top line of Chinese companies.

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Is JD.com undervalued after recent price declines?

Wall Street expects JD.com’s sales to grow by 18.6% to $81.33 billion in 2019 and increase 16.5% to $94.75 billion in 2020. JD.com’s earnings per share are estimated to rise by 65.7% in 2019 and 58.6% in 2020. JD.com stock is currently trading at a forward PE multiple of 45.3x for 2019, and the stock looks undervalued considering this multiple.

No one can predict how the trade war will pan out. JD.com is a large-cap company with a strong balance sheet and robust growth. JD.com’s strong fundamentals make it an attractive pick at the dips.


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