Nike’s turnaround plan under CEO Elliott Hill is taking longer than expected , and the impact that will have on the company’s financials is changing JPMorgan’s outlook on the stock. The bank downgraded on the apparel company to underweight from neutral. It also cut its price target on shares to $40, which indicates a 6% loss from Monday’s close. Analyst Matthew Boss wrote in a Tuesday note that the company’s “Win Now” turnaround plan is expected to weigh on Nike’s balance sheet for the next few years. “A key clarification from our recent mgmt access ( & filings) – the financial impact of “Win Now” decisions made through the end of calendar year 2026 will linger and impact NKE’s P & L in 2H27 and into FY28,” Boss wrote. Nike also faces headwinds in several of its key markets, he wrote. Those include China, where the company has seen sales decline of late . But the company is about to hit a $1 billion revenue headwind as Nike seeks to revamp its digital marketplace presence in the region, Boss estimated. NKE mountain 2024-10-14 Nike since Elliott Hill CEO Boss also said Nike faces forward revenue headwinds in North America. As the company goes about reducing its U.S. store footprint by about 10%, he said Nike will grapple with the financial impact of the closures until they’re fully annualized, likely around July 2027. Shareholders will now look to the company’s Investor Day in November for the next clue about the company’s turnaround, in which Boss said he expects Nike to outline a three-year plan for fiscal years 2027 through 2030. But while he estimates that Nike will recover from its difficult position today by the start of the next decade, he thinks the growth the company once experienced is likely unachievable again. Shares were tumbling more than 3% in premarket trading Tuesday. Analysts in general aren’t too bullish on Nike. Of the 42 who cover it, 25 rate it a hold, per LSEG. Another two assigned an underperform-equivalent rating.
