Shares of JD.com (JD -4.92%), the Chinese e-commerce giant, continued to slide today as downbeat news on the Chinese economy was weighing on the stock once again. Additionally, one Wall Street analyst lowered its price target, reflecting ongoing negativity around the stock.
As of 12:03 p.m. ET, JD.com stock was down 4.9%.
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China concerns keep growing
The world’s No. 2 economy officially reported that gross domestic product (GDP) grew 5.2% in 2023, and slowed to 4.1% in the fourth quarter. While those numbers reflect faster growth than most of the rest of the world, they represent a clear slowdown for China, and confirm the negative sentiment around the country. Other indicators also show weakness, including factory production, and most economists believe China is entering a period of secular slowing growth.
Additionally, China’s population fell for the second year in a row, showing that efforts to support population growth and new families have fallen flat.
Separately, Mizuho lowered its price target on JD.com stock from $40 to $35, though it maintained a buy rating on the stock. The firm cited a “meaningful divergence of consumer confidence levels” in the U.S. and China internet sectors. It also advised investors to “play defense” in China as it expects consumer spending to remain down.
How low can JD.com stock go?
JD.com stock tumbled 49% last year. It’s continued to fall in 2024 as its partner Dada Nexus revealed accounting inaccuracies, and investors seem increasingly fearful that its rapid growth from before the pandemic will never return. Additionally, the company has been losing market share to Pinduoduo parent PDD Holdings.
JD.com is solidly profitable, but revenue only grew 1.5% in its most recent report. The stock should eventually hit a bottom, but it’s likely to fall further if more downbeat economic news on China comes out.
