Citigroup is optimistic about JD.com's core retail profitability and shareholder returns, setting a target price of $35

Citi published a research report indicating that the bank held the "2026 Innovation Pioneer Enterprise Day" event on March 31 and yesterday (the 1st), inviting the management of JD.com (JD.US) to participate in the meeting. The meeting focused on discussions including the resilience of core JD retail profits, new business investments and losses in the delivery business, internationalization strategy, and commitments to shareholder returns. The bank maintained a "Buy" rating on JD.com with a target price of $35.

The bank quoted JD.com's management stating that despite seasonal fluctuations and a high base in the first half of the year, the group's goal is to maintain overall profit resilience, with its competitive advantage ultimately lying in the deep integration with both white-label and brand supply chains to enrich product offerings and provide high cost-performance for consumers. JD.com's new businesses include delivery, international operations, and expansion into lower-tier cities through Jingxi. In light of regulatory uncertainties and changes in the industry landscape, JD.com will proactively optimize its delivery business, and overall new business losses in 2026 are expected to be lower than in 2025.

Citi believes that JD.com's valuation is not high and its strong free cash flow yield constitutes a compelling investment rationale. If management reduces profit-diluting investments in the delivery business, the expected path to profit improvement will be clearer. JD.com's unparalleled supply chain should provide it with a deep and defensive moat to withstand disruptions from agency-based commerce