JPMorgan has significantly upgraded its rating for Nike’s stock, signaling a potential resurgence for the athletic apparel titan. This move underscores the bank’s conviction that Nike stands at a crucial inflection point, poised to embark on a new growth cycle fueled by strategic operational refinements, pioneering product innovation, and a renewed emphasis on profitability.
- JPMorgan elevated Nike (NKE) from a “neutral” to an “overweight” recommendation.
- The price target was raised to $93 per share from the previous $64, implying an 18% upside.
- Revenue growth is projected to accelerate starting in the second half of 2026.
- Nike’s strategic focus is shifting to maximizing full-price sales, innovation, and operating expense optimization.
- The company aims to recover over 500 basis points of operating margin by the second quarter of 2026.
- An additional 200 to 300 basis points of operating margin expansion is anticipated beyond 2028.
JPMorgan’s Bullish Outlook
The financial institution elevated Nike (NKE) from a “neutral” to an “overweight” recommendation, concurrently increasing its price target to $93 per share from the previous $64. This revised target implies an 18% upside from Nike’s recent closing price of $76.27. Matthew Boss, a JPMorgan analyst, specifically forecasts an acceleration in Nike’s revenue growth commencing in the second half of 2026.
Strategic Realignments for Margin Recovery
Boss emphasizes that after enduring several quarters marked by challenges related to key franchise lifecycles and inventory pressures, Nike’s strategic focus is pivoting towards maximizing full-price sales, leveraging product innovation, and rigorously optimizing operating expenses. This strategic realignment is anticipated to facilitate the recovery of over 500 basis points in lost operating margin, driven by improved commercial positioning and a stabilized cost environment. A pivotal component of this overarching strategy involves a global alignment of sales and inventory processes, projected for completion by the second quarter of 2026.
Innovation and Future Growth Drivers
Further reinforcing this optimistic outlook is the consistent growth observed in global wholesale orders. Nike has proactively engaged with its partners, including a recent presentation that highlighted significant advancements within its innovation pipeline. The Spring/Summer 2026 product line, in particular, has garnered “highly favorable” initial feedback. This positive reception is expected to translate into heightened consumer adoption and robust distributor support, laying a strong foundation for subsequent product cycles.
Long-Term Profitability Trajectory
Examining the long-term trajectory, JPMorgan’s analysis suggests Nike could expand its operating margins by an additional 200 to 300 basis points beyond 2028. This potential expansion could see profitability levels return to pre-pandemic benchmarks of 12% to 13%, representing a substantial improvement from the current projection of 10% for fiscal year 2028.
Market Underestimation and Sustainable Growth
Despite Nike’s stock registering less than a 1% gain year-to-date, JPMorgan posits that the market has yet to fully acknowledge the comprehensive potential of this multi-year recovery path. The firm firmly believes Nike is meticulously laying the groundwork for a sustainable new growth cycle, underpinned by enhanced commercial discipline, continuous product innovation, and strategic operational leverage.
Sophia Patel brings deep expertise in portfolio management and risk assessment. With a Master’s in Finance, she writes practical guides and in-depth analyses to help investors build and protect their wealth.