Overview
BofA Securities has trimmed its price target on JD.com, Inc. to $36.00 from $38.00 but left its Buy recommendation intact. The bank’s analyst, Joyce Ju, published projections for JD.com’s upcoming fourth-quarter 2025 results, which the firm expects to be reported in March.
Revenue and category trends
BofA models total revenue of RMB356 billion for the quarter, a 2.6% increase year over year, and notes that this forecast is in line with consensus estimates. Within that topline, BofA anticipates a 3.1% year-over-year decline in direct sales revenue. The firm attributes the decline mainly to a 13% drop in sales of home appliances and electronics. That weakness is partially offset by continued mid-teens growth in general merchandise categories. Marketplace and other services revenue are expected to grow strongly, rising 26% year over year according to the bank’s estimates.
Profitability outlook
On margins, BofA projects JD Retail operating profit of RMB7.8 billion for the quarter, implying a 2.6% operating margin versus 3.3% in Q4 2024. The bank models this as a 22% year-over-year drop in operating profit, which it links to substantial Singles Day subsidies, with the home appliances segment noted as a particular area of heavy discounting.
At the group level, BofA expects JD.com’s non-GAAP net profit to be RMB0.9 billion, which is higher than the Street estimate of RMB0.6 billion. The firm also forecasts that losses from new initiatives will narrow to RMB14.9 billion, down from RMB15.7 billion in the third quarter.
Analyst reactions and peers
Recent analyst activity shows a range of responses to JD.com’s results and strategic path. CFRA raised its price target to $37 and maintained a Buy rating, citing the company’s expansion in food delivery as a reason for the change. HSBC lowered its target to $37 from $39, pointing to weaker home appliance sales trends that it links to a decline in retail sales reported by the National Bureau of Statistics. US Tiger Securities reduced its target to $35 from $40 while keeping a Buy rating, noting softening consumption trends in China, particularly in home appliances. Benchmark reiterated a Buy rating with a $38 target, even as it cut its fourth-quarter 2025 estimates due to growth challenges and softer consumer spending. Susquehanna kept a Neutral rating with a $32 price target, reflecting the company’s ongoing investment cycle.
Context on recent results
JD.com recently reported quarterly revenue that exceeded market expectations, but profitability lagged due to large investments in new business lines, notably an expanded food delivery service. The combination of aggressive promotional activity and continued spending on new initiatives has produced diverging analyst views on near-term margins and medium-term returns.
Key takeaways
- BofA reduced its price target to $36 but kept a Buy rating while forecasting RMB356 billion in Q4 2025 revenue, a 2.6% year-over-year increase.
- Direct sales are projected to decline driven by a 13% fall in home appliance and electronics sales, offset partly by mid-teens growth in general merchandise and a 26% rise in marketplace and other services.
- Profitability is under pressure from heavy Singles Day subsidies and ongoing investments, with JD Retail operating profit modeled at RMB7.8 billion and group non-GAAP net profit at RMB0.9 billion.
Risks and uncertainties
- Weaker demand in the home appliance and electronics category could further depress direct sales and retail margins - affecting the consumer retail sector.
- Heavy promotional subsidies, particularly around Singles Day, may continue to compress operating margins and profitability - relevant to both e-commerce and consumer discretionary markets.
- Ongoing investments in new initiatives, such as food delivery, create execution and profitability uncertainty as losses from these businesses remain sizable - impacting investor returns and the services segment within the company.