Jumia stock soars after RBC upgrades on improving supply chain

Investing.com -- Jumia Technologies AG (NYSE: JMIA), often coined the "Amazon of Africa," saw it’s stock surge 23% following an upgrade from RBC Capital Markets, which cited improving supply chain conditions and easing currency pressures as catalysts for growth.

Analyst Brad Erickson raised his rating on the African e-commerce company from Sector Perform to Outperform and significantly increased his price target to $15.00 from $6.50, representing potential upside of over 50% from current levels.

The upgrade came after RBC hosted meetings with Jumia’s CEO and CFO, where management expressed bullishness about gaining momentum with Chinese suppliers. This improvement stems from stabilizing currency conditions across Jumia’s African markets and Chinese sellers seeking alternatives amid U.S. tariff pressures.

"We’ve underappreciated the magnitude of the headwinds the company faced last year due to currency volatility and thus, anything approaching stability from here could allow for further supply expansion, order growth acceleration and upside in the shares," Erickson noted in his report.

Jumia has expanded its presence in China, adding headcount to strengthen partnerships with suppliers. The company has experienced such rapid growth in its Shenzhen location that it recently ran out of office space for new employees.

Management indicated strong visibility for continued acceleration through year-end, with potential momentum extending into early 2026. The company may also ramp up marketing spend next year after several years of cost rationalization while in "balance sheet preservation mode."

RBC believes Jumia could increase its take rate by 50-100 basis points annually over the next 3-4 years as it gains leverage with Chinese sellers, though this is not reflected in the firm’s current estimates.

Jumia operates in 11 African countries, with its largest opportunities in Nigeria, Kenya, Egypt, and Ghana. The company expects fulfillment costs to decline by 10% annually as it implements cost optimization strategies to enhance profitability.

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