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Investing.com - Deutsche Bank (ETR:DBKGn) raised its price target on JD Sports Fashion plc (LON:JD) (OTC:JDDSF) to GBP1.00 from GBP0.85 on Tuesday, while maintaining a Hold rating on the stock.
The firm cited several factors that could potentially shift its previously bearish view on the sportswear retailer, including an end to the earnings downgrade cycle, visibility on a Nike (NYSE:NKE) comeback, and rebuilding confidence in management.
Deutsche Bank noted that while negative sentiment has driven a material de-rating in JD Sports shares, progress is beginning to be made, though this doesn’t necessarily translate into earnings upside yet.
The analysts highlighted two key considerations for JD Sports’ outlook: what a Nike comeback would actually mean for the retailer as Nike increasingly segments wholesale channels while bringing on new partners, and the balance of risk regarding US consumer price elasticity.
Deutsche Bank expressed concern that risks related to US consumer price sensitivity may be weighted toward retailers like JD Sports rather than brands themselves.
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