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Why JD.com Stock Was Climbing Today

What happened

Shares of JD.com (NASDAQ: JD), the Chinese e-commerce giant, were moving higher today on several news items, the biggest of which was a bullish analyst rating.

As of 11:20 a.m ET, the stock was up 9.2% on the news.

A JD.com worker with an autonomous vehicle. Image source: JD.com.

So what

Atlantic Equities initiated coverage on JD stock with a buy rating and a price target of $100, which represents 44% upside from the stock's closing price yesterday.

Additionally, CNBC reported last night that the company was opening automated stores in Europe, similar to Amazon Go stores, where robots will prepare and deliver packages. The first two are in The Netherlands, and shoppers can visit the stores to pick up items they've ordered. It represents the company's first brick-and-mortar foray into Europe, opening up a huge market for JD.

Chinese tech stocks were also rallying in general, with peers like Alibaba and Pinduoduo gaining as investors are increasing bets the China's central bank will cut interest rates this year in order to give the struggling economy a boost, and authorities have a signaled openness to a rate cut, which could come as soon as next week. That would be bullish for Chinese tech stocks like the trio of e-commerce companies above.

Now what

JD stock has slumped over most of the last year as Chinese stocks underperformed over fears about regulators cracking down on big companies and on the potential for Chinese stocks being delisted from U.S. markets.

However market sentiment may be shifting in 2022, JD's performance as the business remains strong and the automated store openings in Europe show its potential to expand in new and unique ways. At the current price, the stock still looks like a good value given its long-term growth potential.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman owns Alibaba Group Holding Ltd., Amazon, and JD.com. The Motley Fool owns and recommends Amazon and JD.com. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.


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