RBC Capital Markets hails JD Sports resilience

The bank highlighted JD’s strong brand relationships and its appeal to younger shoppers, for whom sports fashion is a high priority purchase.

"The outlook should improve in H2, following the FY results and the annualisation of tough comps in the US," it said.

RBC noted that JD has a strong balance sheet and trades at 12x CY22E price-to-earnings, which it think fails to reflect its longer-term growth potential. It also pointed out that Nike was clear on its third-quarter results call last week that it has finished the adjustments it is making to wholesale partners and allocations.

"While it is difficult to have visibility on the long term, we think JD is well placed to build on its strong relationship with Nike due to its ability to offer access to a more cash based urban customer, its buying, merchandising and data analytics expertise, and as it can help to growth Nike’s apparel business in elevated stores," it said.

RBC rates JD Sports at ‘outperform’ with a 250p price target.

At 1340 BST, the shares were up 1.6% at 152.60p.