Citi's analyst rating for JD-SW (09618.HK) was influenced by several factors outlined in their research report. The primary reasons for the rating include:
1. Weak Macro and Consumption Sentiment: There is ongoing weakness in the broader economic environment and consumer spending, which is impacting the company's performance.
2. Revised Profit Forecasts: The non-GAAP net profit forecasts for JD.com were significantly reduced, with a 66.2% cut for 4Q25 and a 13.8% cut for 1Q26, indicating a more pessimistic outlook for the company's earnings.
3. Target Price Adjustment: Citi lowered the target price for JD.com from USD 37 to USD 34, reflecting the revised profit expectations and the current market conditions.
4. Maintained Buy Rating: Despite the lowered target price and the identified challenges, Citi maintained a Buy rating due to the stock's undemanding valuation, suggesting that it may still be a good investment opportunity in the long term.
5. Limited Short-Term Catalysts: The broker noted that there are limited catalysts for growth in the short term, which could affect the stock's performance in the near future.
Overall, the rating reflects a cautious but still optimistic view on JD.com, balancing the current challenges with the potential for recovery in the future.
