Morgan Stanley: JD.com (JD.US) 2Q26 to Be Better Than Feared
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Key Views
JD Retail OPM is expected to improve 5 basis points year-over-year, driven by gross margin gains in general merchandise. New business losses should narrow sequentially from RMB 10.4 billion in 1Q26 to RMB 9.8 billion in 2Q26, with food delivery losses at approximately RMB 6.5 billion.
Outlook
Revenue growth is expected to bottom in 2Q26 before recovering in 2H26 on easier comparables. OPM improvement in 2H26 should exceed that of 2Q26. New business losses are projected to remain stable, as narrowing food delivery losses are offset by increased investment in Jingxi and overseas operations.
Recommended Securities
JD.com (JD.US): Maintained at Underweight with a $27 target price, corresponding to 9x 2026 non-GAAP P/E. The valuation appears unattractive relative to a 10% earnings CAGR despite better-than-feared quarterly performance.
Key exhibits
Exhibit 1
Exhibit 2
