JD.com, Inc.:New Uncertainties in Growth and Margins; Downgrade from BUY to Hold
JD will report 2Q16 results on Wednesday, August 10th before the market open with a 7:30am EST conference call. We are expecting both 2Q16 revenue and 3Q16 top line guidance to be slightly below consensus expectation. In addition, we believe the company’s margin may be under pressure from the newly acquired Yihaodian, an online company in China formerly owned by Walmart. Both growth and margin issues may last for a while. As such, we downgrade the stock from BUY to HOLD and wait for signs of improvement.