JD Sports slips in London, Barclays cuts rating to 'underweight'

(Il Sole 24 Ore Radiocor) - A negative day for JD Sports, among the worst performers on London's FT-SE 100 with a drop of almost 4%. The stock is currently down 2.55 per cent at £1.14 per share. Weighing on the sportswear and footwear chain's stock is the downgrade by Barclays, which has lowered its rating from 'equal-weight' to 'underweight', i.e. a sell recommendation, with a price target lowered from £1.40 to £1.10 per share.

Barclays explained that Nike's recent disappointing quarterly results and, above all, the outlook given by the US giant, which raised doubts about the numbers for the coming quarters, forecasting a mid-single digit sales decline of around 5% year-on-year for the fiscal year 2025, which began in June, against the +2% expected by the consensus. In addition, the US giant's top executives pointed to a weak economic environment and a decline in sales of lifestyle products in the final quarter.

A slowdown in demand for sportswear and footwear would also have obvious repercussions for JD Sports, as almost half of the group's revenues are tied to Nike's main lines, such as Air Jordans and Air Force 1. Incidentally, in the wake of the results Nike has given up almost 20% in the last five sessions (today in premarket Wall Street is up fractionally). "Downside risks are seen for JD Sports, which raises doubts about performance," Barclays analysts point out. Also for Citi's experts, 'cautious ongoing product management and more limited success of lifestyle products will continue to be a headwind for JD Sports, but could create near-term opportunities for other competitors'.