Komo maintains Nike (NKE.US)'s low rating: mired in the pain of adjustments, the pressure on performance may continue until the 2028 fiscal year

The Zhitong Finance App learned that recently, J.P. Morgan Chase released a US stock research report on Nike (NKE.US). The research team participated in a face-to-face meeting with Nike's new CFO Denton, maintaining Nike's “Underweight (Underweight)” investment rating in conjunction with management statements to update profit assumptions. The target price remained at 33 US dollars in December 2027. The report warns that due to the influence of the Jordan brand and the strategic reshaping of the Greater China region, the company's performance pain cycle may be extended to fiscal year 2028.

The new CFO Denton has 30 years of experience in corporate financial management and has worked for Pfizer, Lowe's, and CVS Health. Its past history shows that when the company's growth stalls, the first task is to repair internal operations before it can drive the operating flywheel. This line of thinking has also become the core logic of Nike's current reforms.

Looking at short-term results, Nike will face double revenue headwinds in the second fiscal quarter. In addition to the large promotion base in Europe, the Middle East and Africa region, and the North American wholesale channel's high sales last year, which dragged down revenue by about 400 basis points, active strategic adjustments between the Jordan brand and the Greater China region will have an additional negative impact. J.P. Morgan estimates that the company's second-quarter earnings will fall 13.2% year-on-year, lower than the market's consensus forecast -- 10.7%; the adjusted EPS is expected to be only $0.30, which is significantly lower than the market forecast of $0.37. Excluding the one-time boost from the World Cup, Nike's fixed exchange rate endogenous income actually fell 6%-7% year on year in the first fiscal quarter, and the fundamentals are already weak.

Management confirmed that Nike is taking the initiative to reduce the sales scale of vintage Jordan shoes, with orders from some partner dealers falling by up to 50%; the rectification of online channels in Greater China has basically been implemented, but there is still a lot of work to be done to optimize offline stores. The financial impact brought about by related reforms will not stop in FY2027 and will continue to spread to FY2028. Disturbed by inventory backlogs, it is difficult for the “Pace Project” to reduce costs and increase efficiency to fully release dividends in the short term. The cost savings brought by the project will be offset by inventory pressure, and gross margin repair progress will be slower than market expectations. J.P. Morgan predicts that Nike's revenue for the 2028 fiscal year will still decline 2.8% year on year, and EPS will be 1.13 US dollars, which is far below the market's unanimous optimistic expectations.

Although the global sportswear circuit is still booming for a long time, the agency predicts that the industry will grow at an annual rate of 4.8% by 2030, and the North American running business is showing some positive signs, the report indicates that **Nike is not a growth enterprise** at this stage, and international markets such as Europe and Greater China still need to be deeply reset. Global terminal sales are under pressure, and the return time for revenue inflection points and double-digit operating margins has been significantly lengthened.

Nike will host Investor Day in November. The market will focus on two major points: one is management's clear guidance on the strategic adjustment cycle and financial impact for the 2028 fiscal year; the second is the complete path from starting with the current operating margin of 5.3% to recovering the FY31 double-digit profit margin of about 10%.

At the risk level, the report suggests that the recovery in US consumer consumption exceeds expectations, the weakening of the US dollar, and the improvement of tariff policies are expected to catalyze the rise in stock prices; however, currently, the company's stock price is dominated by the company's own factors, and downside risks cannot be ignored. As of October 21, 2026, Nike's stock price was $37.53, and its cumulative performance during the year significantly outperformed the S&P 500 index.