JPMorgan Chase said that now is a good time to take a stake in Vipshop stock. The bank upgraded the stock to overweight following Vipshop’s first-quarter earnings report earlier this week. JPMorgan also set a price target of $18, an increase of more than 20% from Wednesday’s close. “We believe Vipshop (VIPS) will be the best defensive play in the China e-commerce space for the next six months due to earnings visibility/upside risk…and share price correction in the past week (-13% vs. KWEB -6% ) provides an entry point for investors,” analyst Andre Chang wrote in a note on Thursday. VIPS 1D mountain VIPS jumped “Its focus on apparel and accessories (over 70% of revenue) and off-price sales has given it a cyclical tailwind that we think will follow the 1Q’23 beat in the coming few years The quarter further beat market expectations,” he added. Through its $1 billion share repurchase program, the company’s earnings could grow further by 6% a year for the next two years, the analyst said. He estimates this could boost earnings per share by more than 10%, which the company’s estimates don’t reflect. “We expect more surprises in the coming quarters,” Chang said. “Despite intensifying competition, we believe Vipshop will be price-competitive enough as a discount sales channel to secure its niche user base (40M+ per quarter, 80M+ per year) despite cyclical tailwinds in the category, but its scale Small enough to offer some upside, which in our view means VIPS should be able to keep growing with limited investments.” The stock rose in premarket trading on Thursday after rising 5.3% in the previous session 2.1%. The stock is up 9.4% so far this year. —CNBC’s Michael Bloom contributed to this report.