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J.P. Morgan has upgraded Nike's rating, citing key positive factors including: - Relief from cost pressures: The new trade agreement reached with Vietnam in early July has eliminated tariff concerns. Nike originally expected $1 billion in costs impact from tariffs in fiscal year 2026, but now they can gradually absorb this impact through price increases and supply chain optimization. - Profit margin inflection point visible: Despite a 440 basis point year-on-year decline in gross margin to 40.3% in the fourth quarter of 2025, with continued pressure expected, the main financial impacts of the "Win Now" strategy have already been absorbed by the market, making the path to profit margin recovery clearer. The significant promotional activities carried out previously to clear inventory are now decreasing their suppressive effect on profit margins. - Effective product innovation: New products such as the Air Max Premium and Vomero 18 have received strong market responses, enhancing Nike's pricing power and market position against competitors like adidas and lululemon.