Sam Boughedda

Investing.com — Morgan Stanley analyst Eddy Wang reiterated an Overweight rating and $80 price target on Chinese e-commerce company JD.com Inc (NASDAQ:) Wednesday but told investors there is uncertainty ahead. 

Wang said that the company had a solid year, however Omicron- and Covid lockdowns have negatively impacted revenue growth.

The revenue forecasts were exceeded by the company, but Tuesday’s quarterly revenue growth was its lowest ever.

In light of the unpredictable Covid situation, rolling lockdowns and JD’s expected revenue growth of 6% in Q22, we expect JD to see its revenues rise 6% YoY. NBS reported that China’s online retail sales dropped 5.2% yoy last April. According to Wang, JD expects its revenue to decline YoY for April because of JD’s greater exposure to first-tier cities. Wang wrote that BJ, SH and GZ experienced lockdowns during April. 

He said that even though JD revenues have been slowly recovering since May, it is uncertain if the Omicron situation will change. 

Analyst also mentioned China’s 618 E-Commerce Shopping Festival. He explained that while merchants were more active in participating than in previous years, there is a high base of 2021 618 sales and potentially low consumer sentiment which could slow down revenue growth for the second quarter.

JD.com ADRs down 4.9%