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How Do Analysts View JD.com Stock?


Jun. 21 2019, Updated 9:56 a.m. ET

Analysts’ estimates

Of the 37 analysts tracking JD.com, 32 have recommended “buys,” four have recommended “holds,” and one has recommended a “sell.” Analysts have a 12-month average target price of $33.23 on the stock, which indicates a potential upside of 17.6% from its current price.

Alibaba (BABA), Baidu (BIDU), and Sina (SINA) are trading at discounts of 31.0%, 50.0%, and 41.0%, respectively, to analysts’ average estimates.

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Is JD.com stock undervalued?

JD.com stock is trading at a forward PE multiple of 27.7x. This multiple does seem a bit cheap considering the company’s earnings growth rate going forward. JD.com’s earnings are expected to expand by 94.3% in 2019, 50.0% in 2020, and 35.0% in 2021. The PE multiple indicates that JD.com stock is grossly undervalued at current prices.

Though JD.com has significant upside potential that is supported by a robust earnings and revenue growth rate, there are still a lot of uncertainties. For one, the trade issues between China and the United States need to be sorted out.

We will get an idea about what to expect from the trade war when President Trump meets his Chinese counterpart at the G20 Summit later this month. If there is a dead end, tensions might escalate driving Chinese stocks lower.


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