Cautious Hold Rating for JD Amid Aggressive Investment Strategy and Earnings Pressure

In a report released today, Eddy Wang from Morgan Stanley maintained a Hold rating on JD (JD – Research Report), with a price target of $41.00.

Eddy Wang has given his Hold rating due to a combination of factors influencing JD’s financial outlook. The company’s recent aggressive investment in its food delivery segment, marked by substantial subsidies, has driven rapid growth in order volume. However, this strategy could result in earnings pressure, potentially leading to a decrease in the anticipated earnings growth for 2025.
Additionally, while JD has benefited from short-term revenue boosts due to a trade-in program, the increased expenditure on food delivery may offset these gains. Wang’s price target for JD is set at $41, which is based on a valuation that considers the projected earnings growth. Despite the potential for growth, the risks associated with the current investment strategy warrant a cautious approach, justifying the Hold rating.

In another report released on April 22, Macquarie also downgraded the stock to a Hold with a $35.00 price target.