Is the JD Sports share price an outright bargain?

July 11, 2023 08:55 AM PDT | By Invezz

Is the JD Sports share price an outright bargain? — Image source: Invezz

Growth concerns remain

JD Sports and Fashion is a well-known company that focuses on outdoor and sports apparel. It operates in over 30 countries, making it a leading seller of key brands like Nike, Adidas, New Balance, and Juicy Couture.

JD Sports business is doing well as demand for sporting apparel and accessories jump after the pandemic. In May, the company published strong annual results that revealed its annual revenue jumped to over £10.12 billion pounds.

Its EBITDA came in at over £1.2 billion while profit before taxes soared to over £1 billion. Most of these profits came from its sports fashion business. JD’s revenue growth has been spectacular since it had over £4.7 billion in 2019. Its profit jumped from £438 million in 2020.

JD’’s growth is mostly because of its multichannel approach to its business. While the firm makes most of its revenue in its retail stores, its e-commerce platforms are growing at a fast pace. It is also growing its store openings, mostly in the US and Canada. It hopes to end the year with 254 stores in the two countries up from the current 144. It is also expanding in Europe and around the world.

It has also grown through acquisitions. It recently closed the buyout of Iberian Sports Retail Group. Other large acquisitions are companies like Genesis Topco and Marketing Investment Group.

Therefore, I believe that JD Sports and Fashion is a fast-growing company that is relatively undervalued. It has a healthy balance sheet and strong margins. Most analysts are also bullish on the stock. JP Morgan expects the shares to rise to 210p while Berenberg and Shore Capital see it rising above 200p.

JD Sports share price forecast

The daily chart shows that the JD Sports Fashion stock price has been in a strong downward trend after peaking at 211p on March 8th. This decline coincides with the weak performance of companies like Nike and ANTA Sports. It has dropped below the 25-day and 50-day EMA.

At the same time, the MACD and the Relative Strength Index (RSI) have continued moving downwards. It has also formed a falling wedge pattern, which is usually a bullish sign. Therefore, there is a likelihood that the stock will have a bullish breakout soon.

The post Is the JD Sports share price an outright bargain? appeared first on Invezz.

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