UBS Affirms JD.com's (JD) ‘Buy' rating Cuts Price Target on Spending Concerns
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UBS is concerned that JD.com may need to invest more to maintain its competitive edge in the food delivery business. It estimates that the company might have spent upwards of RMB 10 billion, comparable to Alibaba's spending in the quarter.
The research firm expects JD.com food delivery investments to reach Rmb14 billion in the third quarter before dropping to Rmb11 billion in the fourth quarter. Nevertheless, UBS maintains a Buy rating as it expects the company to maintain its return on investment as part of its food delivery strategy while also balancing its strong volume growth.
UBS also expects Jd.com to benefit from traffic growth in the beverages segment amid heightened spending from female users and those in lower-tier cities. The company should also capitalize on rapid growth in daily and monthly active users.
JD.com, Inc. (NASDAQ:JD) is a leading Chinese technology-driven e-commerce company. It operates a vast retail business and also offers services in technology, logistics, healthcare, and other sectors.
While we acknowledge the potential of JD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 15 Successful Spin-Off Companies and Their 2025 Returns and 12 Best Consumer Goods Stocks Billionaires Are Quietly Buying.
Disclosure: None. This article is originally published at Insider Monkey.
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