JD.com rises to new buyback plan by Investing.com

Shares of JD (NASDAQ:).com rose about 4.65% in premarket trading on Tuesday after the Chinese e-commerce giant announced a new share buyback program.

The company’s board approved the plan, effective September 2024, allowing JD.com to buy back up to $5 billion of its stock over the next 36 months, with the program set to end in August 2027.

The move is seen as a strong signal of confidence from the company.

JD.com’s buyback strategy has been a key factor in keeping investors interested, especially in a market where technology companies are increasingly returning capital to shareholders.

Citi analysts had anticipated the announcement, recently placing JD.com on a 30-day Catalyst Watch pending a new buyout plan.

They pointed to the company’s quick use of previous buyback authorizations, noting that JD.com exhausted its $3 billion buyback program announced in March 2024 in just five months.

“JD is among the notables that have aggressively stepped up their redemption pace,” the bank said in its note last week. “After using $2.1 billion of its previous $3 billion buyback program from 2020-2021 since March this year, it only took about 5 months for JD to fully use its latest REPO of $3 billion authorized and announced in March 2024, demonstrating JD’s commitment. towards shareholder profitability.

“Given that there is no outstanding amount left in any of JD’s REPO programs, we believe that it is highly likely that JD will seek board approval and announce a new buyback program between now and the printing of the 3Q24E result – this would support the share price, hence we open a positive 30-day Catalyst Watch,” they added.

With a substantial cash reserve of $20.2 billion, Citi maintained a Buy rating on JD.com, seeing the stock as attractively priced.