JPMorgan Downgrades Nike to Underweight on Turnaround Concerns

JPMorgan downgraded Nike from Neutral to Underweight on Tuesday, citing a prolonged timeline for the company's turnaround strategy led by CEO Elliott Hill. Analyst Matthew Boss warned that strategic "Win Now" decisions made through 2026 will negatively affect profit and loss statements through the second half of fiscal 2027 and into fiscal 2028.

Financial headwinds include a planned reset of the online marketplace in Greater China starting in January 2027, which is projected to result in an annual revenue loss exceeding $1 billion. Additionally, the company plans to reduce its U.S. store footprint by 10%.

JPMorgan lowered its December 2027 price target to $40 and reduced earnings per share estimates for fiscal 2027 and 2028, placing them approximately 10% and 20% below consensus. The firm expects Nike to unveil a three-year plan during its November investor day, targeting double-digit operating margins by fiscal 2030.