JD.com, Inc (JD) PT Raised to $33 at MKM Partners; Reiterates Neutral

MKM Partners raised its price target on JD.com, Inc (NASDAQ: JD) to $33.00 (from $27.00) while maintaining a Neutral rating. Direct sales GMV growth accelerated 400bps sequentially to 46% and gross margin continue to show a solid increase, up 49bps y/y. Online marketplace GMV growth decelerated 900bps sequentially to 52%.

Analyst Rob Sanderson commented, "JD reported a strong quarter, with revenue handily beating Street estimates for revenue and delivering a positive net income margin (non-GAAP) for the third consecutive quarter. Net margin for 2016 was 0.4%, the high-end of management guidance for -0.5% to 0.5%. The divestiture of the JD Finance business makes JD a cleaner play on China retail growth. The China online retail environment remains strong, JD continues to gain share and while still a narrow margin, the company is crossing over into sustainable profitability. We are raising our estimates to the high-end of guidance. On our higher outlook for revenue and profit growth, our fair value estimate is increased from $27 per share previously to $33 per share. Maintain Neutral."

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