JPMorgan Takes Aim at Nike's Earnings Prospects
JPMorgan downgraded Nike stock to Underweight with a $40 price target, citing concerns that the company's turnaround decisions will pressure earnings through fiscal 2028.
The bearish call is at odds with the consensus view of analysts, who have a strong Buy rating on the company. However, JPMorgan's numbers are sobering: they estimate FY27 EPS at $1.55, which is around 10% below Street consensus, and FY28 EPS at $1.72, or about 20% below consensus.
The main concerns for Nike are its China reset in January 2027, which will create a revenue headwind of over $1 billion annually, as well as store closures in North America that will continue through the first half of FY28.
While some analysts agree with JPMorgan's bearish view, others remain optimistic about Nike's prospects. The company's CEO has outlined a three-year plan to target double-digit operating margins by FY30, which could catalyze a re-rating if successful.