Nike introduced its Win Now turnaround strategy to boost the business, but this plan ended up leading to a downgrade of the stock on Tuesday.
J.P. Morgan downgraded Nike and reduced its price target, citing the financial impact of the company’s turnaround plan as the main reason for its more cautious outlook.
Nike shares dropped 3% in premarket trading on Tuesday, erasing the 2.2% gain from Monday. The stock is still down 33% for the year.
After talking with company management and reviewing regulatory filings, J.P. Morgan said the financial effects of Nike’s Win Now strategy will continue to affect the company’s profits through the end of this year and into the second half of 2027 and fiscal 2028.
The biggest factor was Nike’s choice to change its online strategy in China. Last month, the company said that starting in 2027, its digital marketplace in China will focus on official Nike flagship stores on Tmall, JD.com, and Douyin, as well as its own website and app. Third-party online retailers will stop selling Nike products.
J.P. Morgan explained that Nike wants to make its digital flagship stores the main place for customers to experience the brand on these platforms, with clearer product displays, better storytelling, and a more connected customer experience. However, the firm estimated this change will cost Nike about $1 billion in revenue in China.
