JD Stock Aims to End Earnings Slump

JD shares are hovering above recent lows ahead of earnings

Chinese e-commerce powerhouse JD.com, Inc. (NASDAQ:JD) has seen its stock price plummet in recent months, even compared to the broad-market struggles. The shares have underperformed the S&P 500 Index by more than 25 percentage points during the past three months, while holding near two-year-low territory under the pressure of their 50-day moving average. Now down roughly 43% year-to-date, last seen trading at $23.74, JD will attempt to turn things around with earnings due out before the open on Monday, Nov. 19, but the equity has struggled after recent quarterly reports.

In fact, JD.com stock has closed lower the day after earnings in four of the past five quarters, including three in a row. However, that means the last positive performance was in this quarter last year. As for expectations among options traders, they're pricing in a 7.7% swing for Monday's session, compared to the equity's average single-day post-earnings move of 4.8% during the past two years.

Digging deeper into recent large changes in open interest, the June24 put saw the largest increase in the past two weeks, while the January 2019 40-strike put saw a huge decrease in open positions. On the call side, the January 2019 30 strike was popular.

Also of note, half the brokerage firms tracking JD shares have "strong buy" ratings, despite the sell-off this year, and the average 12-month price target stands at a significant 48% premium to current levels, clocking in at $34.83. As such, another earnings disappointment could spark a wave of bear notes on the China stock. Of course, some investors may be paying closer attention to U.S.-China trade talks instead of earnings, with the two countries slated to meet at the G20 economic summit later this month.