Nike's China strategy is becoming a growing debate on Wall Street, with JPMorgan warning of a steep revenue hit while Morningstar focuses on the long-term turnaround.

  • JPMorgan cut its second-half of 2027 and 2028 earnings estimates for Nike to 20% below consensus.
  • Morningstar recently said Nike’s China decision should benefit partner retailers in the country if the company regains sales momentum, margins, and brand health in the long run.
  • Wall Street sentiment on Nike stock is largely neutral, as per Koyfin data.

Shares of Nike Inc. (NKE) attracted significant investor attention on Tuesday after JPMorgan downgraded the stock to ‘Underweight’ from ‘Neutral,’ citing revenue headwinds down the line from its Chinese market.

As of the writing, the stock was down more than 3% in premarket trade and was among the top ten trending tickers on Stocktwits.

JPMorgan Expresses Worries On Recent China Decision

In late July, the company said its digital marketplace in China will be managed only through the official Nike flagship experiences on Tmall, JD.com and Douyin, alongside Nike.com.cn and the Nike App beginning in January 2027. The decision was made as part of a broader “Win Now” strategy, which was introduced back in 2024 by veteran CEO Elliott Hill.

Analyst Matthew Boss said Nike's "Win Now" decisions made in 2026 will hurt profits into fiscal 2028, according to a report from TheFly. Based on that, the analyst estimated Nike would face a $1B revenue headwind in China for fiscal 2028, as online sales would be completely terminated at Topsports and Pou Sheng.

JPMorgan also cut its second-half of 2027 and 2028 earnings estimates for Nike to 20% below consensus, citing the financial impact of its "Win Now" decisions. NKE has a price target of $40, which now implies more than 6% downside potential based on the stock’s previous closing price.

Morningstar Still Has Hope For China

In a recently published note, Morningstar analyst David Swartz said the China decision should benefit partner retailers in the country if Nike regains sales momentum, margins, and brand health in the long run. The firm believes the new policy may reduce near-term sales but thinks Nike will return to sales growth and a more typical EBIT margin of 31% in fiscal 2028.

“The firm has been struggling in China, but we still believe it has a great opportunity for revenue growth there as the market expands through wealth creation and government investment in athletics. Nike is working to regain its leading market position and pricing power in the country by clearing old inventory and investing in marketing and local product development,” the analyst said.

According to data from Koyfin, Wall Street sentiment on the company is largely neutral, with 25 out of 39 analysts covering the stock, rating it a ‘Hold’ or higher. The stock has 12 ratings at ‘Buy’ or higher and two ratings at ‘Sell.’

On Stocktwits, retail sentiment toward the stock has turned ‘neutral’ from ‘bearish’ over the past 24 hours. NKE shares are down 33% so far this year and 43% in the last 12 months, underperforming the S&P 500.

For updates and corrections, email newsroom[at]stocktwits[dot]com<