JPMorgan Puts Nike Stock on 'Negative Catalyst Watch' Ahead of Q1 Earnings

JPMorgan placed Nike (NYSE:NKE) on "Negative Catalyst Watch" ahead of its upcoming fiscal Q1 2025 earnings report, scheduled on October 1.

JPMorgan analysts lowered their EPS forecast for Nike’s first quarter to $0.48, below the Street estimate of $0.52, citing a projected 10% drop in gross profit dollars—worse than the expected 9.3% decline. The firm pointed to headwinds across all major geographic regions contributing to Nike’s challenges.

In China, demand has weakened due to cautious consumer behavior and digital promotions, while local competitors continue to capture market share through competitive pricing. In the Europe, Middle East, and Africa (EMEA) region, softening consumer traffic and intensified competition in both lifestyle and performance categories are weighing on Nike's performance. Meanwhile, in North America, the company faces difficulties in its direct-to-consumer (DTC) factory stores, which are particularly affected by reduced spending from lower-income consumers.

JPMorgan also revised its full-year fiscal 2025 EPS estimate for Nike to $2.98, falling below the Street estimate of $3.08, driven by revenue projections that are 5.9% lower than anticipated. The bank now expects Nike’s financial recovery to be delayed until fiscal 2027, with a margin recovery likely preceding revenue growth in fiscal 2026.

While JPMorgan expressed optimism about Elliott Hill’s recent appointment as CEO, signaling a potential shift back to Nike’s core strategies, the firm expects near-term financial challenges to persist.