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Shares of JD.com (JD - Free Report) opened sharply higher on Monday morning after Alphabet’s (GOOGL - Free Report) Google announced a strategic partnership with the Chinese e-commerce giant that will include a $550 million investment from the search giant.
The two tech companies said Monday that they will team up to promote and sell goods online in key markets, such as Southeast Asia, the U.S., and Europe.
The partnership should help both firms better compete with the likes of Amazon (AMZN - Free Report) and Alibaba (BABA - Free Report) , which currently present formidable opposition to Google and JD throughout the world.
The agreement will see JD make a number of “high-quality products” available for purchase through Google Shopping in multiple regions, underscoring the company’s desire to expand into additional markets.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said Jianwen Liao, JD’s chief strategy officer, in a statement.
JD has its eyes set on Europe, where it will likely square off against Amazon, and Southeast Asia, a new battleground for Chinese tech firms including Alibaba.
For Google, the partnership is an opportunity to improve its e-commerce skills by combining its own technology with JD’s supply chain management expertise. Similarly, Google paired up with Walmart (WMT - Free Report) last year to allow users to shop from the retail behemoth through Google Assistant.
The deal with JD is also an opportunity to expand Google’s footprint in China, where many of its traditional internet products are banned. There was no mention of Google working with JD on initiatives in China specifically, but we do know the firm is interested in the country. Earlier this year, it led a $120 million investment in Chushou, a Chinese sports streaming company.
JD’s early gains today could help extend the stock’s impressive two-week run, which has seen shares add nearly 24% after slumping to a 52-week low. Still, if the company wants to break back toward the favorable end of its 52-week range, it will need to get analysts excited about its near-term earnings prospects.
In the last 60 days, JD has witnessed three negative revisions to its current-quarter EPS estimates and four negative revisions to its full-year EPS estimates. This has dragged our consensus projection for the current quarter three cents lower, while JD’s full-year Zacks Consensus Estimate for earnings has lost 14 cents.
This negative earnings sentiment followed two consecutive EPS misses from the Chinese company, with annual earnings growth now expected to come in at just 15% in 2018.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
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Why Did JD.com (JD) Stock Open Higher Today?
Shares of JD.com (JD - Free Report) opened sharply higher on Monday morning after Alphabet’s (GOOGL - Free Report) Google announced a strategic partnership with the Chinese e-commerce giant that will include a $550 million investment from the search giant.
The two tech companies said Monday that they will team up to promote and sell goods online in key markets, such as Southeast Asia, the U.S., and Europe.
The partnership should help both firms better compete with the likes of Amazon (AMZN - Free Report) and Alibaba (BABA - Free Report) , which currently present formidable opposition to Google and JD throughout the world.
The agreement will see JD make a number of “high-quality products” available for purchase through Google Shopping in multiple regions, underscoring the company’s desire to expand into additional markets.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said Jianwen Liao, JD’s chief strategy officer, in a statement.
JD has its eyes set on Europe, where it will likely square off against Amazon, and Southeast Asia, a new battleground for Chinese tech firms including Alibaba.
For Google, the partnership is an opportunity to improve its e-commerce skills by combining its own technology with JD’s supply chain management expertise. Similarly, Google paired up with Walmart (WMT - Free Report) last year to allow users to shop from the retail behemoth through Google Assistant.
The deal with JD is also an opportunity to expand Google’s footprint in China, where many of its traditional internet products are banned. There was no mention of Google working with JD on initiatives in China specifically, but we do know the firm is interested in the country. Earlier this year, it led a $120 million investment in Chushou, a Chinese sports streaming company.
JD’s early gains today could help extend the stock’s impressive two-week run, which has seen shares add nearly 24% after slumping to a 52-week low. Still, if the company wants to break back toward the favorable end of its 52-week range, it will need to get analysts excited about its near-term earnings prospects.
In the last 60 days, JD has witnessed three negative revisions to its current-quarter EPS estimates and four negative revisions to its full-year EPS estimates. This has dragged our consensus projection for the current quarter three cents lower, while JD’s full-year Zacks Consensus Estimate for earnings has lost 14 cents.
This negative earnings sentiment followed two consecutive EPS misses from the Chinese company, with annual earnings growth now expected to come in at just 15% in 2018.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>