JD.com, also known as Jingdong, is one of China's largest e-commerce companies, specializing in online retail. Founded in 1998 and headquartered in Beijing, it started as a brick-and-mortar store selling electronics but later transitioned to an online platform. JD.com is known for its vast logistics network, which includes warehousing and delivery capabilities, ensuring fast and reliable service across China.
The company offers a wide range of products, including electronics, apparel, and household goods, catering to millions of consumers. JD.com distinguishes itself from competitors like Alibaba by focusing on direct sales and its own inventory, which helps maintain quality control. The company is also heavily involved in technological development, such as artificial intelligence and automation, to improve its logistics and retail services.
Earnings are forecast to grow at 17.6% annually over the next three to five years and the company has been buying back shares aggressively, with plans to repurchase $5 billion worth over the next 36 months.
The technical pattern on JD stock is especially compelling. After breaking out from the massive base several weeks ago, the price has taken a brief rest and built out a bull flag. If the price can trade meaningfully above the $46 level, I would expect another big rally to occur. Alternatively, if it loses the $42 level of support, it may need more time, and investors may want to wait for another opportunity.
JD Shares Trade at a Fair Valuation
Because the Chinese stock market has been under selling pressure for nearly three years following a collapse in the real estate market and broad economic slowdown, JD along with other leading stocks in the country are trading a deeply discounted valuations.
Today, JD.com is trading at a one year forward earnings multiple of 11.7x, which is well below the market average and its five-year median of 42.8x. And with earnings forecast to grow 17.6% annually over the next several years, JD has a PEG ratio of just 0.66, a discount based on the metric.
Finally, JD pays a tidy 1.7% dividend yield, which has been raised by 23% in the last year.
Should Investors Buy Shares in JD.com
JD.com presents a compelling investment opportunity given its current fundamentals and favorable market conditions. The mix of strong profit growth, cheap valuation and strong stock price momentum makes for a trifecta of bullish catalysts.
It should be noted that investing in international stocks comes with an additional level of risk, but for investors looking to allocate internationally or to trade momentum stocks, JD.com may be a great stock to buy.
Bear of the Day:
Albany International is a global advanced textiles and materials processing company. It primarily serves the paper and aerospace industries through two segments: Machine Clothing and Albany Engineered Composites. The Machine Clothing segment supplies custom-designed fabrics used in paper production, while Albany Engineered Composites provides advanced materials and components for the aerospace market, including for commercial and defense applications.
Headquartered in Rochester, New Hampshire, Albany International operates across North America, Europe, and Asia, and is known for its innovation in materials technology and manufacturing expertise.
Albany International stock has struggled recently as earnings growth has been flat over the last five years along with the stock price. More recently the stock broke below a major level of support further dampening sentiment, while analysts have also downgraded the stock, giving it a Zacks Rank #5 (Strong Sell) rating. Although there will be a price where AIN is an appealing stock, based on the current setup, I think investors should avoid it.
AIN Earnings Estimates Crater
Over the last two months, earnings estimates have seen some hefty revisions lower. Current quarter earnings estimates have declined by 34%, while FY24 have fallen by 8.2% and FY25 by 6.7%.
Earnings growth is also expected to slide 39% YoY for the current quarter and 15% for the current year. However, earnings are expected to pick up again, with FY25 expected to grow 22.3%. Sales are also expected to maintain a decent pace of growth with forecasts of 7.7% growth this year and 7.8% next year.
Technical Breakdown in AIN Stock
In the chart below we can see that after languishing for nearly four years, the stock price flushed below a major level of support. This is not an encouraging development, and the analysts' downgrades only adds selling pressure.
Until the stock can find some upward momentum, I would expect to see more selling as the company trades towards a discount valuation.
Should Investors Avoid AIN Stock?
Albany International is currently facing significant challenges, which have led to its "Strong Sell" rating. The company's earnings estimates have taken a substantial hit and although revenue is projected to grow this and next year, the declining earnings have raised concerns.
Additionally, the recent technical breakdown reflects ongoing bearish sentiment. This weak outlook, coupled with recent analyst downgrades, suggests that investors may want to avoid the stock until there are signs of a sustained recovery in earnings growth and market sentiment.
Additional content:
Buy Netflix (NFLX) Ahead of Q3 Earnings This Week?
Netflix Inc., the global streaming giant, is set to report third-quarter 2024 earnings results on Oct. 17 before the opening bell. The stock price of Netflix has soared 54.3% year to date, surpassing the S&P 500's rally of 22.6%.
Netflix has an Earnings ESP of +1.37% and carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #1, 2 or 3 (Hold) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Factors That Should Drive NFLX's Q3 Results
Netflix is projecting double-digit revenue growth and an increase in margins as it moves toward advertising for monetization. NFLX is benefiting from its growing subscriber base, thanks to a robust portfolio, paid subscription-sharing offering (part of its password-sharing crackdown), recent price changes and the strength of its business in general.
NFLX is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized and foreign-language content.
Netflix has witnessed a successful 2024 so far, buoyed by the success of shows like Bridgerton and Baby Reindeer. Market participants have high hopes about its upcoming releases such as Season 2 of Squid Game and a new season of Stranger Things in 2025. NFLX will show the Christmas schedule of the National Football League for the first time, and it will start showing wrestling on WWE Raw from 2025.
A section of analysts expects a price rise by NFLX and its positive effects on the company's financials. Strong brand value and subscriber base will have incremental effects of price rise. This will enable Netflix to successfully compete with the likes ofAmazon Prime Video of Amazon.com Inc. and Disney+ of The Walt Disney Co..
Impressive Earnings Estimate Revisions of NFLX Stock
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $9.77 billion, an improvement of 14.3% year over year and earnings per share (EPS) of $5.07, a jump of 35.9% year over year. The company reported positive earnings surprises in three out of the last four reported quarters with the average beat being 6.2%.
Moreover, Netflix has witnessed positive earnings estimate revisions for fourth-quarter 2024, full-year 2024 and full-year 2025 in the last seven days. At present, Zacks Consensus Estimate indicates a year-over-year increase of 14.8% and 58.9%, respectively, for revenues and EPS in 2024.
Despite this solid growth, the current Zacks Consensus Estimate for full-year 2025 revenues and EPS for NFLX reflects an upside of 12% and 19.7%, respectively. In addition, NFLX has a long-term (3-5 years) EPS growth rate of 26.4%, significantly higher than the broad-market index, the S&P 500's growth rate of 13.6%.
Price Potential of NFLX Shares
Netflix is currently trading near its 52-week high level. Currently, the short-term average brokerage target price is in the range of $900-$545. This indicates an upside potential of 24.5% and a downside potential of 24.6%. Nevertheless, we believe that NFLX's favorable Zacks Rank and a possible earnings beat should drive its stock price in the short term.
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