JD.com Q1 financial report surprises? Wall Street: Core business recovery combined with reduced losses in food delivery business
Multiple positive signals are converging, and major Wall Street investment banks have collectively expressed bullish views on JD.com on the same day.
According to Chasing Wind Trading Desk, Barclays, JPMorgan Chase, and HSBC released research reports successively on April 14, unanimously optimistic about JD.com's trend of fundamental improvement.
The shared logic of the three institutions focuses on two main points: First, the macro environment for consumer and e-commerce improved in the first quarter, with JD.com's general merchandise and platform services—both high-margin businesses—showing stronger-than-expected growth momentum;
Second, the trend of narrowing losses in the new food delivery business is becoming increasingly clear. Regulators continue to send signals to market participants, urging a return to rational competition, which further reinforces the certainty of loss reduction.
General Merchandise & Platform Business Become Core Highlights, Expected to Drive Revenue Structure Optimization
In the forward-looking forecasts from major banks for JD.com's first quarter, the acceleration in growth of general merchandise and platform & marketing services was repeatedly mentioned.
According to Barclays’ industry research, these two segments saw year-on-year growth rates of 12.1% and 15% respectively in Q4 last year. They may further accelerate in Q1. The year-on-year growth rate for general merchandise revenue in Q1 is expected to rise from the previously estimated 12.0% to 12.5%, and platform & marketing services revenue growth from 13.5% to 15.5%.
HSBC also expects general merchandise will maintain a 12.5% year-on-year growth in Q1, with platform and advertising revenue growing about 15% year-on-year.
Meanwhile, home appliances and 3C categories remain a drag. Barclays expects the segment's revenue in Q1 will still decline by about 8% year-on-year, close to previous expectations, and predicts that it could return to positive growth as early as Q3 2026—when the high base effect of "trade-in" subsidies gradually fades, helping overall revenue growth to pick up in the second half of the year.
Food Delivery Loss Turning Point Nears, Overall Loss Reduction Pace Better Than Expected
At the new business level, the narrowing losses in the food delivery business are a key basis for major banks raising their profit forecasts.
JPMorgan believes regulators have recently sent multiple signals opposing irrational competition. Domestic food delivery market subsidies have started to cool, prompting the bank to narrow its loss forecast for new businesses in 2026 from 45 billion yuan to about 35 billion yuan (an improvement of about 10 billion yuan compared to consensus).
HSBC predicts that food delivery losses will shrink significantly from about 36 billion yuan in 2025 to about 25 billion yuan in 2026.
On user metrics, HSBC cites QuestMobile data showing JD.com's monthly active users (MAU) grew 13% year-on-year in Q1, faster than competitors’ 2%-3% growth rates, and the ratio of daily active/users (DAU/MAU) also improved about 2 percentage points year-on-year to 23%-24%. The improvement in user quality lays a foundation for platform monetization.
JoyBuy Europe Moves Forward More Cautiously, Short Term Focuses on Experience and Fulfillment
On overseas expansion, institutions' wording is more cautious, emphasizing "pace of investment and controllable losses" over "expansion speed."
Barclays quoted management saying that JD.com's investment in European business through JoyBuy will be "carried out gradually," with a short-term focus on user experience, especially fulfillment, rather than scaling the business.
JPMorgan also observed cautious spending on customer acquisition after JoyBuy’s March European launch, and expects that international business progress in 2026 will be even more prudent compared to flash sales loss reduction.
HSBC estimates that due to early warehousing and delivery investments, overseas business will still lose money in 2026, with quarterly losses likely around 1-2 billion yuan, subject to order volume fluctuations.
Minimal Valuation Differences, Current Share Price Seen as Attractive
On valuation, the three institutions use different methods, but all conclude that the current price offers a clear margin of safety.
Barclays uses EV/EBITDA, raising its target multiple from 5x to 6x (based on expected 2027 EV/EBITDA), with a target price of $41; bullish scenario is 7x, target price $48; bearish scenario is 4x, target price $27.
JPMorgan bases its target price of $38 on 9x expected 2027 PE (3-year average), corresponding to a roughly 11x expected 2026 PE ratio. It notes the core business valuation (excluding all new business losses) is only about 6x, implying considerable upside in the most optimistic scenario.
HSBC uses a DCF model (WACC 10.6%, terminal growth 3.5%), maintaining a $35 target price, and considers the current approximate 9x 2026 expected PE ratio attractive. Also, there's a repurchase quota equivalent to about 5% of market cap ($2 billion, effective until August 2027) supporting the valuation.
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The above highlights are from Chasing Wind Trading Desk.
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