Why Vipshop Holdings Ltd. Jumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Vipshop Holdings were moving higher once again today, gaining as much as 13% and finishing up 11% after an analyst upgrade.
So what: Credit Suisse lifted its rating on the Chinese online retailer to "outperform" from "neutral" and raised its price target to $178 from $145. The Swiss bank said Vipshop was a stable company in a volatile sector and believed growth in cosmetics and baby products would be particularly strong this year.
Now what: Vipshop has blown out the broader market over the past year as shares have climbed more than 400% on excitement about the potential of China's booming middle class. After a recent spike, shares had fallen off in the past month with the momentum sell-off, but the Credit Suisse upgrade seems to have stopped the bleeding. Vipshop has beaten earnings estimates solidly in each of its past four quarters on the strength of its flash sales model, which give shoppers deep discounts in exchange for memberships. With sales growing by triple digits, the sky looks like the limit for Vipshop. I'd expect shares to keep moving higher as long as the company continues to beat estimates.
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The article Why Vipshop Holdings Ltd. Jumped originally appeared on Fool.com.Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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