JD.com Inc (NASDAQ:JD) shares surged on Friday after analysts at Jefferies increased their price target on the Beijing-headquartered online retailer while maintaining a ‘Buy’ rating.
Analysts raised their price target to $60 from $54. JD shares added 9.1% at $38 on Friday morning.
Looking ahead to JD’s Q4 results, they expect the company to demonstrate strong execution with solid performance following the Double-11 shopping festival, a major sales event in China, besides being a beneficiary of trade-in programs.
“In 4Q, we revise up total revenue and non-GAAP earnings factoring in better-than-expected performance in JD retail revenue and segment online program management amid return on investment approach in spending,” they wrote in a note to clients.
“Strengths in supply chain capabilities and strategies on user growth, price competitiveness and third-party ecosystems pave for long term.”
They forecast revenue growth of $9.6% year-over-year, up from their earlier estimate of 6%, to RMB 335 billion.
JD retail revenue is forecast to increase by 11% year-over-year, up from their prior estimate of 6.5%.
They estimate JD’s non-GAAP net profit will grow by 16% year-over-year in Q4, with margins expected to expand from 2.6% to approximately 2.9%.