Nike Stock Could Gain on a Turnaround. J.P. Morgan Sees 17% Upside.

Nike remains a “global athletic market leader” despite recent challenges, J.P. Morgan analysts wrote. (Justin Sullivan/Getty Images)

As Nike continues to clean out inventories in a bid to stage a turnaround, J.P. Morgan analysts see a buying opportunity.

In a note Monday, analysts led by Matthew Boss upgraded shares of the apparel maker to Overweight from Neutral and boosted their price target to $93 from $64. Shares climbed 4% to $79.32, with the new target implying 17% upside.

The upgrade comes after J.P. Morgan raised its full-year 2026 and 2027 estimates for Nike. Boss believes Nike has visibility toward a “multiyear recovery path” after months of sales growth trailing inventory growth.

Nike is taking “continued liquidation actions” throughout its Factory stores and certain partners to return to reduce discounting by the first half of 2026, Boss noted.

J.P. Morgan describes Nike as a “global athletic market leader” with diversification across product categories, geographies, and distribution. And the retailer already seems to be staging a comeback, with management noting on the latest earnings call that holiday order books were up year over year, marking a sequential improvement from the fall.

Shares got a boost last month when Nike posted a better-than-expected fourth quarter. While sales fell 12% from the previous year, they exceeded expectations, and guidance for the current quarter was a bright point. The stock has gained nearly 27% since the close on June 26.

J.P. Morgan sees room for further growth as Nike scales its Performance product pipeline, and builds momentum within its wholesale order books. Beyond 2028, Nike could return to prepandemic profitability, Boss asserted. In short: “Just buy it!”

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com