Major Wall Street banks take the lead! Q4 earnings season for US stocks kicks off

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Earnings Options Strategy | JD.com's Q4 earnings under pressure a foregone conclusion? Can retail resilience and reduced losses in food delivery break the weak stock price trend?

$JD.com (JD.US)$ Set to release its Q4 and full-year 2025 earnings before the market opens on March 5, 2026, all eyes are on this financial report filled with contradictions and expectations.

According to consensus estimates, JD.com is expected to generate revenue of 352.892 billion yuan in Q4 2025, representing a mere 1.70% year-over-year increase; expected earnings per share (EPS) is -0.628 yuan.A shift from profit to loss compared to the same period last year.(The above data follows the US-GAAP accounting standard.)

In 2025, JD.com aggressively expanded its food delivery business and normalized its billion-yuan subsidy program. On the other hand, it faces 'threefold pressure' from slowing online retail growth, intensifying competition, and heavy investment in its food delivery segment. Analysts widely expect weak Q4 revenue growth, with EPS even turning from profit to loss.

It seems that JD.com’s Q4 earnings under pressure may already be a foregone conclusion. How will management respond and craft their narrative under such immense pressure? Against the backdrop of a significant stock price decline, will the stock price fall further after the earnings release? How should one position an options strategy?

I. Key Focus Areas for Q4 Earnings

(I) Pressure on JD.com’s Retail Foundation, but Resilience Lies Within Its Structure

JD.com Retail, as the absolute core business of the group, contributes the majority of revenue and profits. However, its core 'moat' is currently facing multi-dimensional challenges. The Q4 2025 faces pressure from a high base in the same period of 2024 and weak macro consumption recovery.

Revenue for JD.com Retail in the fourth quarter is expected to decline by a low single-digit percentage (approximately 3-4%), primarily due to weak sales performance in electrical appliance categories.According to data from the National Bureau of Statistics, during the same period in 2024, the national subsidy policy for home appliance trade-ins had a significant impact, driving home appliance sales growth by over 20%. In Q4 2025, retail sales of home appliances and audio-visual equipment nationwide followed a 'decline first, then rise' trend, with an overall quarterly year-over-year decrease of 5.5%.This declining trend has a particularly significant impact on JD.com, as home appliances and electronics have historically been JD.com’s strong categories.

Despite the anticipated pressure on overall retail due to the impact on home appliance categories, mobile phones and daily necessities are expected to maintain double-digit growth.The national subsidy policy for mobile phones only began implementation in January 2025, while daily necessities will benefit from the synergistic effects of food delivery and instant retail businesses, with cross-selling rates among users continuing to rise.

The market generally expects JD.com Retail’s operating profit margin to decline. Its self-operated model and logistics infrastructure form the core barriers to quality and timeliness but also bring heavy cost pressures.At the same time, increased user subsidies (such as the billion-yuan subsidy) and merchant support (such as 0% operational service fees) implemented by JD.com to respond to competition have further squeezed profit margins.，Its ability to control costs and optimize efficiency will become an important dimension for evaluating this earnings report.

(II) JD.com Logistics: As a leader in the self-operated supply chain model, it demonstrates strong revenue visibility.

JD.com's deepest moat is not its products, but its 'super supply chain' capability built up with heavy investment and time.As of the end of September 2025, JD Logistics' warehousing network has almost covered all counties and districts nationwide, operating and managing over 3,600 warehouses of various types, with a total managed area exceeding 34 million square meters.

In Q3 2025, JD Logistics service revenue hit a record high.In Q3 2025, JD Logistics' total revenue reached 55.1 billion yuan, a year-on-year increase of 24.1%. Among this, integrated supply chain revenue grew by 45.8% year-on-year, leading the industry and laying the foundation for delivery revenue growth in Q4.

According to data from the State Post Bureau, the total volume of express delivery business in 2025 reached 198.95 billion pieces, a year-on-year increase of 13.6%, with business revenue reaching 1.5 trillion yuan, up 6.5% year-on-year.The overall development momentum of the express delivery market remains strong.JD.com reduces costs through smart forecasting system technology, combined with the powerful user perception established by its '24-hour delivery' service.It is expected that JD Logistics' revenue in Q4 2025 will maintain double-digit year-on-year growth.

(III) New Business: Dual Game of Scale Expansion and Short-term Losses

Progress in new business is another major focus of this earnings preview. Although JD.com’s Q3 2025 revenue and net profit exceeded expectations, huge losses from new businesses such as food delivery eroded operating profits.

Institutions generally expect JD.com's food delivery business losses to narrow quarter-on-quarter.CMB International expects the overall loss of new businesses in the fourth quarter to be RMB 14.5 billion, improving from RMB 15.7 billion in the third quarter, with food delivery business losses narrowing quarter-on-quarter to RMB 10.4 billion. UBS Group expects that, driven by the improvement in the unit economics (UE) model and stable order volume for the food delivery business, the scale of losses for new businesses in the fourth quarter is expected to narrow quarter-on-quarter.However, the report simultaneously warns that the company’s continued heavy investments in Jingxi and international operations may partially offset this improvement.

The long march of AI large models in industry is also one of the market’s focal points.Unlike other internet giants engaged in an arms race over general large models, JD.com’s AI progress is rooted in its vertical scenarios such as retail, logistics, health, and industry. Examples include providing more than 50 AI tools to over 3 million merchants, enabling autonomous decision-making and collaboration via 'Logistics Superbrain 2.0,' and launching three C-end applications: 'Jingxi' (a shopping lifestyle portal), 'Tashata' (digital assistant), and 'JoyInside' (robot intelligence platform).

The efficiency gains of AI-powered advertising tools have become a key highlight for JD.com’s long-term growth.JD.com’s marketplace and advertising revenue grew by 24% year-over-year in the third quarter, accelerating from 22% growth in the second quarter. Analysts at UBS Group believe this strong growth is primarily driven by two factors. On one hand, platform traffic continues to improve, with user activity and shopping frequency increasing by over 40% year-over-year. On the other hand, JD.com’s continuously optimized 'AI-driven advertising tools' and traffic allocation efficiency have become sustainable growth drivers.

(4) Shareholder Returns and Dividend Guidance

Despite short-term performance pressures, JD.com remains solid in terms of shareholder returns.In Q4 2025, JD.com completed a $1.5 billion share repurchase, bringing the total repurchases for the year to $3 billion, demonstrating management’s commitment to shareholder returns. The scale of repurchases and dividend guidance for 2026 will be focal points in the Q4 earnings report. If management commits to increasing repurchase efforts, it could effectively boost market sentiment.

2. Major bank views: Most institutions are cautious about earnings, with Citi downgrading its target price before results

Currently, most institutions hold a cautious stance on JD.com's Q4 earnings, with the overall consensus being that there will be limited surprises in this report. JD.com's retail business is expected to face growth pressure due to the 'withdrawal of national subsidies'.

In January 2026,Institutions including Bank of America Securities, Barclays, and CMB International have all lowered their target prices for JD.com.

Zhaoyin InternationalIt forecasts that JD.com’s total revenue for the fourth quarter will be RMB 349.2 billion, a slight year-over-year increase of 0.6%, but its non-GAAP net profit will plummet by 96% year-over-year to RMB 484 million.CMB International has cut its target price for JD.com from $50.5 to $46.8.

Citi BankOn February 15, 2026, a research report was released,Lowering JD.com's target price from $37 to $34 while also reducing net profit forecasts for 2025-2027, mainly due to rising costs and expenses.Citi assesses that JD.com is in a 'high-cost stable-growth' defensive cycle, with revenue stability achieved by sacrificing short-term profitability and increasing subsidies. The market no longer pays a premium solely for supply chain efficiency but factors in a discount for uncertainties brought by new business expansion. Nevertheless, Citi maintains a Buy rating.

Additionally, some institutions believe that if JD.com's management fails to clarify the profit recovery path for 2026, the sustainability of subsidy policies, or the profitability inflection point for food delivery services during the earnings call—or discloses further widening losses in new businesses and weaker-than-expected macro consumption—this could add further pressure on the stock price. Conversely, if guidance is optimistic and specific measures for reducing losses and improving profit margins are outlined, it may trigger a short-term rebound in share price.

Third, technical analysis: Can earnings drive a rebound amid low valuations and weak trends?

In terms of valuation and stock price movement, JD.com's current share price has retreated nearly 27% from its short-term high in September 2025 and over 40% from its peak in October 2024.

As of the report released on March 2, 2026, $JD.com (JD.US)$ the price-to-earnings ratio (TTM) is 8.56 times, $JD-SW (09618.HK)$ and the price-to-earnings ratio (TTM) stands at 8.14 times, both significantly lower than the industry average, reflecting the market’s bearish expectations regarding its short-term earnings pressure and investment in new businesses.

JD.com's US-listed shares have continued to decline recently, with the current stock price still in a downward trend. The 5-day, 10-day, and 20-day moving averages are showing a bearish alignment, suppressed by the 60-day moving average. Short-term rebound momentum remains weak, but technical indicators such as RSI suggest some degree of oversold conditions.

From the perspective of position distribution, resistance lies in the $28–$28.8 range, while the $22–$26 range represents a dense area of positions prior to the start of the previous rally, providing some support. If earnings fall below expectations, the stock price may drop further to the lower end of this range.This set of results slightly exceeded expectations, and the stock price may rebound to the 60-day moving average. Unless this performance significantly surpasses expectations, breaking the current weak trend and moving above the 60-day moving average, the stock price will likely remain range-bound in the short term, struggling to form a sustained rebound.

Fellow investors, how do you view JD.com’s stock price movement after the Q4 earnings release?

Fourth, options strategy: Seizing opportunities in low volatility

Currently, JD.com’s implied volatility (IV) for options is at a low level, with an IV percentile of 46%, indicating that option prices are relatively cheap compared to historical levels, offering investors a chance to position themselves. Overall, a call-buying strategy could be considered.

1、No stock holdings, no directional bets: A pure options strategy focused on going long volatility

For investors without stock positions and not speculating on earnings direction, a pure options strategy to go long on volatility can be considered by purchasing a straddle option combination (buy Call + Put) before the earnings announcement. For instance, Calls and Puts expiring on March 6 with a strike price close to the current price (26.5 USD).

Key points of operation:Complete position building before the earnings release, then sell for profit after volatility increases post-announcement. Profit-taking must be done before volatility declines to avoid losses from a drop in volatility. Be mindful of accelerated time decay, with holding periods not exceeding 1-2 days.

Based on JD.com's historical performance volatility patterns, the average post-earnings fluctuation is 5.22%.

2. Investors who believe that short-term earnings pressure will lead to further stock price decline: small position single-leg put.

Investors who think JD.com’s fierce competition in the instant retail space has caused a significant decline in Q4 revenue, slower-than-expected narrowing of losses in the food delivery business, and continued high base effects coupled with subsidy rollbacks through the first half of 2026, leading to a further stock price decline, can consider buying puts while maintaining strict position control, focusing on in-the-money options.

3. For those holding stock positions: buy puts for position protection.

Investors who already hold JD.com stock and are optimistic about the company’s supply chain integration strategy but are concerned about short-term stock price declines due to earnings can buy March-expiring Puts to cap downside losses.

JD.com’s Q4 and full-year 2025 earnings represent a comprehensive test under the ‘triple pressures’ scenario. Short-term earnings pressure may already be inevitable. The key focus of this earnings release is not the data itself, but management’s clear guidance on efficiency restructuring and profit recovery for 2026.

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Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products, or tools. The risk of loss in buying and selling options can be substantial. In some cases, your losses may exceed the initial margin amount deposited. Even if you set contingent orders, such as 'stop-loss' or 'limit' orders, these may not necessarily prevent losses. Market conditions may make these orders unexecutable. You might be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any account deficit arising from this. Therefore, before trading, you should study and understand options and carefully consider whether such trading suits you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures upon exercising options and at expiration, as well as your rights and obligations when exercising options and at expiration.

Editor/Doris

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