- JD sports stock price prediction: The JD share price is close to breaking a major resistance. What is next for investors and traders?
- Recent key financial highlights of JD stock. See the financial health of the company.
- The company has seen a fall after May 2023. What is the reason behind it?
About JD Sports: a Beginners Guide
JD Sports PLC was founded in 1981 by the founders, John Wardle and David Makin. The company is involved in the business of retailing and distributing sports fashion wearables and mostly outdoor clothing and equipment.
JD Sports is listed on the London Stock Exchange (LSE) and is a constituent of the FTSE 100 index which consists of the top 100 companies with the largest market cap in the LSE.
The company is headquartered in Bury, United Kingdom, and is currently led by the CEO, Régis Schultz. He is currently supported by more than 44 thousand employees.
Who Owns JD Sports?
JD Sports is a subsidiary of the parent company known as Pentland Group, founded in 1932. It is a British privately owned company. It deals in sportswear retail and wholesale businesses. The CEO of Pentland Group is Andrew Michael Long.
JD Sports Key Financial Highlights of the Recent Periods
- JD Sports revenue for the last quarter that ended in March was GBX 35 Billion. It has declined over 6% from last year.
- The operating revenue that was recorded in the last quarter was GBX 936 Million after a huge expense in marketing and salaries. This number was still more than 146% from last year.
- The net profit for the last quarter ended in March was GBX 912 Million.
- The gross margin for the trailing twelve months (TTM) was reported as 14%.
- The operating margin for TTM was recorded as 2.29%.
- The net profit for the TTM clocked at 1.94%.
- The current earnings per share (EPS) which is a measure of the company’s net profit earnings to the total number of shares was GBX 1.81, and with that, the price-to-earnings ratio is 23.8
- The company has extremely low debts as the debt to equity ratio is 0.11.
- The return on equity (ROE) which is a measure of the company’s net profit earnings to the shareholders’ equity (Reserves + Share capital) TTM was seen as 7.5%.
JD Share Price Previous Price Actions and Reasons
The price started rising after the half-yearly report of July 2022 was seen by the market, where the revenue posted a 13% increase from the last year, and the company was profitable till the unit economics. Here, the positives were reflected in JD share price and the bulls broke a long and major resistance of GBX 136.1, and were able to sustain above to date.
Why Did the Price Decline in May 2023?
After reaching GBX 213, JD share price has seen some corrections as the price broke major support of GBX 161 which was created during the bull run till May 2023. This may have happened as the company has seen a decline in the growth of pre-tax earnings as compared to its last years. This was presented in last year’s annual report which was posted in the market during this time.
JD Share Price Current Actions- Is JD Sports a Buy?
In recent times, the JD share price is trading at the level of GBX 148 and is in a consolidating momentum. It is seen trading between some supports and resistances, while the indicators are also giving some insights for the near future.
Support: The immediate support level for JD is at the level of GBX 136.1 which was a major resistance broken in January of this year. This level has been tested before in June and July of this year as well but a strong rejection was seen.
Meanwhile, the second support level for JD is at the price value of GBX 112. This support level also has some volume which can act as a cushion for bulls.
Resistance: Resistance 1 which is the immediate resistance is seen at the level of GBX 161.1. It broke the previous support of May 2023. The volumes levels are good on this one because it has been tested back in March 2022 as well.
Indicators
MACD: The MACD chart is just going towards 0 after some major selling is seen in the JD stock recently. The signal line just crossed the MACD line on the 2 August this year and is now hovering above it. This behavior is showing a short-term bearish trend.
RSI: The relative strength index is showing a weakness in the pricing level as the JD share price is trading below the mid-level. The strength has seen a decline after reaching the level of 60 points. This behavior has been noticed quite a few times in the past. Currently, the RSI is at 43.
EMAs: The EMAs are currently in touch with each other, and the price is looking to either take a rejection from them or cross them. The 50 EMA is at the level of GBX 152.10 and the 200 EMA is at the level of GBX 151.6.
Are JD Sports Worth Buying?
After a good amount of fundamental and technical analysis, this question can be answered from two different perspectives:
The investors’ perspective: An investor will rather focus on the fundamental side of the company more than the current price action in the market. JD Sports fundamentally is a good and stable company that is consistently making profits and generating revenue with year-on-year growth. Along with this, the company is currently selling its shares at a P.E value of 23 which is very reasonable. Hence for long-term investments, a buying action can be advised.
The traders’ perspective: Currently, the price bounced back from a strong resistance level of GBX 161 and is trading just below the EMAs. If a bullish action is seen, then the JD share price has to rise above the EMAs and also break a strong resistance. If that happens and the stock can sustain, it will further rise towards the 2nd resistance. Hence, the buying action can be made if the stock either bounces off its support 1 or sustains above the EMAs and the immediate resistance.
Conclusion
JD Sports is a subsidiary of Pentland Group, which is involved in the business of retailing and distributing sports fashion wearables. The company is fundamentally strong but is currently in a bearish momentum. The investors can invest for the long term and the traders can buy if the stock sustains the EMAs and its immediate resistance.
Technicals
Support: GBX 136.1, GBX 112.6
Resistance: GBX 161.1 GBX 186.7
RSI: 42
50 EMA: GBX 152.1
200 EMA: GBX 151.6
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
