JPMorgan Downgrades Nike to Underweight, Cuts FY2027 EPS to $1.55 as China Sales Slide
Updated
Updated · Benzinga · Aug 17
JPMorgan Downgrades Nike to Underweight, Cuts FY2027 EPS to $1.55 as China Sales Slide
3 articles · Updated · Benzinga · Aug 17
Summary
JPMorgan cut Nike to Underweight and lowered its earnings forecasts to $1.55 for fiscal 2027 and $1.72 for 2028, arguing turnaround moves through late 2026 will keep pressuring profit into 2027 and 2028.
Nike’s direct-to-consumer push is central to that view: direct revenue rose 73% from 2020 to 2024, but operating margin fell to 8% from 13% as the company added overhead and ceded shelf space to rivals.
Greater China has become the biggest drag, with sales down for eight straight quarters and roughly 30% below 2021 levels even as China’s broader sportswear market expanded.
That points to market-share loss as domestic brands Anta and Li-Ning gain from 'China Chic,' while running specialists On and Hoka also chip away at Nike in technical footwear.
Nike still has about $9 billion in cash and insiders including CEO Elliott Hill and board member Tim Cook have bought shares, but the report says margin recovery must materialize before Wall Street regains confidence.