Chinese online retail giant JD.com Inc (NASDAQ:JD) continues to plummet on the Hong Kong Stock Exchange after hitting an all-time low this week after Wall Street turned bearish on the stock.
Amid the market rout, rumours have circulated regarding the arrest of company chairman Richard Liu, though nothing has been confirmed.
In the past two days, at least seven prominent brokerage firms, including Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C), have either downgraded or reduced their price targets on JD.com's stock.
Rumours aside, JD.com's share price has undergone a significant decline in 2023, having halved since the beginning of the year, reflecting concerns over China's sluggish consumption.
The ruling communist party is grappling with efforts to stimulate spending and economic growth following prolonged Covid-era lockdowns.
Subdued domestic inflation print and lacklustre spending data during the Golden Week Holiday between 1-7 October further impacted the analysts’ sentiment on JD.com stock.
"We expect a long-term trend of consumption downgrade in China, and if JD is not able to successfully implement its low price strategy that caters to the trend, we think it could be in a structurally less favourable position in China’s e-commerce market,” said Morgan Stanley (NYSE:MS).
Morgan Stanley slashed its price target by 40% while downgrading JD.com from 'overweight' to 'equal weight'.
Price downgrades also came from Macquarie, Nomura and HSBC.