Nike's stock price continues to rise, JP Morgan: The World Cup in the United States is coming, buy!

JP Morgan is optimistic about Nike's recovery prospects, strongly recommending a "buy on dips" strategy to capitalize on World Cup opportunities.

On Monday, JP Morgan analyst Matthew Boss upgraded Nike's stock rating from "neutral" to "overweight" and significantly raised its target price from $64 to $93.

JP Morgan's optimistic outlook is primarily based on communication with Nike's management and an in-depth analysis of its latest quarterly performance. Additionally, the World Cup to be held in North America next year will serve as a catalyst for stock price increases.

Boss cleverly adapted Nike's famous slogan "Just Do It" to send a clear signal to investors: "Just buy it." He expects Nike to embark on a "five-fold multi-year recovery path," achieving high single-digit to 20% earnings per share growth over the next five years.

Nike's stock price rose 3.89% on Monday, closing at $79.24, marking the highest closing price since the end of February and making it the fourth largest gainer in the S&P 500 index on Monday. Since the announcement of its fourth-quarter results after the market close on June 26, the stock has surged over 25%, soaring 47.1% from the eight-year low set on April 8.

(Nike's stock price rose 3.89% on Monday)

Business Turning Point Emerging, Recovery in Sight

JP Morgan's research emphasizes that the 2026 World Cup, co-hosted by the United States, Canada, and Mexico, will serve as a sales catalyst for Nike. He expects Nike to expand its performance product line throughout 2026, focusing on developing new running and global footwear products.

Additionally, products focused on basketball and training platforms will support an increase in average selling prices. Boss predicts that by the second quarter of 2026, the company's global inventory will better align with sales growth, while the momentum for global wholesale orders for spring and summer 2026 will strengthen.

Boss forecasts that Nike's operating profit margin will recover by about 5 percentage points between 2026 and 2028, restoring the operating profit margin to 10% over the next three years, higher than the expected 5.3% profit margin for fiscal year 2026. The operating profit margin is a key indicator of sales profitability.

He further noted that after 2028, Nike may have the opportunity to increase its profit margin by an additional 2% to 3%, reaching pre-pandemic levels of 12% to 13%. Boss stated that management views inventory growth relative to sales growth as an effective key performance indicator for assessing global inventory health.

In his report, Boss stated:

We believe revenue growth will re-accelerate in the second half of 2026 and into 2027, as the resistance from several quarters of licensed product lifecycle management and inventory clearance will ease.

JP Morgan's upgrade comes 13 months after the last adjustment, with the new target price of $93 implying about a 19% upside from current levels