JD Sports Shares: Risk/Reward No Longer Skewed to the Downside

Barclays upgraded JD Sports Fashion (LON: JD.) from Underweight to Equalweight in a note to clients this week. 

The bank explained to investors that many of the stock-specific concerns it previously raised have now been either addressed or reflected in the share price.

JD Sports shares rose over 2% in Tuesday’s session.

Barclays also lowered its price target for JD Sports from 110p to 80p, citing a revised FY26 price-to-earnings ratio of 7.5x and a free cash flow yield of 7.5%, increasing to 11% by FY27.

“Our Underweight rating on JD Sports was based on a number of concerns,” Barclays analysts wrote, highlighting “around 50% revenue exposure to Nike, where brand heat has been weak.” 

There were also concerns over financial controls, poor free cash flow conversion, and incentives overly focused on EPS growth without sufficient return on invested capital safeguards.

While Barclays acknowledged ongoing macroeconomic headwinds — including risks from tariffs and potential recession — it said, “with many of our stock-specific concerns either addressed or partly discounted, we no longer consider the risk vs reward as skewed to the downside.”

Barclays’ re-rating suggests a more balanced outlook for JD Sports, which has faced investor scrutiny in recent months, with the stock down over 21% this year.