JPMorgan Slashes Nike Price Target to $40 Amid Turnaround Concerns

Nike Inc.'s (NKE) stock took a hit after JPMorgan downgraded its rating to Underweight from Neutral, citing concerns over the company's turnaround strategy. Analyst Matthew Boss slashed his price target to $40 from $47, arguing that consensus earnings estimates are too optimistic.

Boss warned that the financial drag from Nike's 'Win Now' initiative will be deeper and longer-lasting than Wall Street anticipates. The initiative, unveiled in December 2024, aims to return the company's culture to its sporting roots, forge stronger emotional bonds with consumers, and push product innovation.

JPMorgan estimates that Nike's consolidation of digital presence in Greater China will create an annual revenue headwind of over $1 billion, while a wave of U.S. store closures will also weigh on profits. The bank lowered its fiscal 2027 earnings estimate to $1.55 per share and its fiscal 2028 estimate to $1.72 per share.

The 'Win Now' strategy has already started to show signs of strain, with the company's shares declining 2.05% to $41.76 at the time of publication on Tuesday. Nike is currently trading 22.7% below its 200-day simple moving average.