Sharecast - Berenberg noted that since the initial excitement about the company at the time of its capital markets day in February, the shares have fallen by nearly 30% due to macro uncertainties, peer warnings and perceived execution risks.
"This looks harsh to us, as consensus earnings have continued to rise, and we think risks are lower than the market fears," it said. "We also think investors still underappreciate the strength of JD’s model, its positioning and the international opportunity."
The bank said JD offers "extreme value" for the quality and growth on offer, looking cheap against every peer group.
Berenberg said the stock is priced for significant downgrades, which it does not reckon will materialise, creating an attractive entry point.
"JD is a brand with a huge, proven global growth opportunity: JD is more than a retailer - it is a global brand dominating ‘mindshare’ of the generation-Z consumer, with impressive local and global social media engagement (eg circa 66m TikTok likes versus an average c28m for sports brands and c5m for sports retail peers)," it said.
"There is strong international demand for JD, the foundations for growth have been set, and store targets look very achievable, ‘derisked’ by local management expertise, leading e-commerce and attractive store economics."
The bank said the core JD (LON:JD) fascia is the "jewel in the crown", already internationally proven, with sector-leading profitability and increasing strategic importance to brand partners, which are supporting JD’s accelerated growth ambitions.
Berenberg also argued that reaction to recent acquisitions - adding over 8% to earnings - has been muted, but that these complementary acquisitions bring lots of strategic value, and JD has an excellent track record of creating value from deals.
In addition, near-term concerns are well overdone, it said, noting that JD is still trading down by 13% from the Dick’s Sporting Goods/ Foot Locker (NYSE:FL) warnings, when readacross is limited, and more recent US sports updates have been positive.
"Inventories and the promotional environment will also improve into H2. We expect JD to reiterate guidance at H1 results - sufficient to alleviate investor concerns and drive a relief rally."
Berenberg rates the shares at ‘buy’.
At 0945 BST, the shares were up 2.2% at 137.15 p.