Concerns over JD Sports Fashion PLC (LSE:JD.)’s growth in the US amid a tough demand environment are overstated, analysts believe, with the company set to outdo half-year guidance.
Despite economic uncertainty, JP Morgan analysts expect the sports fashion company to report half-year pre-tax profit in the low to mid-single digits above a roughly guided £370mln.
JD said that organic sales at constant exchange rates had grown by “more than” 15% in the first quarter of this year meanwhile, amid 2023’s results.
“Concerns are overdone,” JP Morgan said in a note, referencing JD’s own admittance of economic uncertainty in the year ahead.
JD had reported 2023’s pre-tax profit at £440.9mln, down 32% from a year earlier. However, earnings rose almost 5% on an adjusted basis to £991.4mln.
Tipping the retailer as “overweight,” JP Morgan suggested the shares could see a prospective rise of 44% to 210p.
Downside risk scenarios to full-year earnings have likely been priced into the company’s shares already, JP Morgan added, with the stock down 5% over the past month.