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JPMorgan Upgrades Nike, Lululemon, Tapestry to 'Overweight'

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  Published in Stocks and Investing on Friday, January 23rd 2026 at 9:23 GMT by CNBC
      Locale: UNITED STATES

New York, NY - Friday, January 23rd, 2026 - JPMorgan Chase has issued a bullish outlook on several prominent consumer goods companies, upgrading Nike (NKE), Lululemon (LULU), and Tapestry (TPR) to 'overweight' from 'neutral,' signaling a belief in a significant acceleration in consumer spending during the second half of 2026. The move has already spurred pre-market gains for the stocks, reflecting investor optimism.

The upgrades represent a shift in JPMorgan's perspective, moving away from recent concerns about a slowdown in retail activity. For months, the consumer sector has faced headwinds, prompting cautious predictions from analysts. However, JPMorgan's team, led by analyst Matthew Choi, now anticipates a more robust environment fueled by a combination of factors, most notably the ongoing cooling of inflation and the potential for a rebound in consumer confidence. This represents a carefully considered bet on the overall macroeconomic climate improving, providing a supportive foundation for discretionary spending.

Why the Optimism?

The firm's revised outlook isn't based on wishful thinking. It's anchored in observable economic trends. Inflation, which has been a persistent drag on consumer purchasing power, has shown signs of abating. While prices remain elevated compared to pre-pandemic levels, the rate of increase has demonstrably slowed, leaving consumers with more disposable income. Crucially, the anticipated drop in inflation is expected to positively influence consumer confidence, which has been sluggish. When consumers feel more secure about their financial futures, they are more willing to spend on non-essential items - precisely the area where these upgraded stocks thrive.

The Specific Upgrades: A Closer Look

• Nike (NKE): The upgrade to 'overweight' accompanied a significant price target increase, jumping from $108 to $115. This indicates a belief that Nike's brand strength and innovative product offerings will allow it to capitalize on the expected spending surge.
• Lululemon (LULU): Perhaps the most significant upgrade, Lululemon's price target was raised from $380 to $410. This reflects JPMorgan's view that Lululemon's loyal customer base and continued expansion into new product categories (beyond athletic wear) will propel growth.
• Tapestry (TPR): The upgrade to 'overweight' for Tapestry, which owns brands like Coach and Kate Spade, came with a price target increase from $45 to $49. While perhaps less dramatic than the Lululemon increase, it still demonstrates confidence in Tapestry's ability to navigate the changing retail landscape and attract consumers seeking aspirational brands.

Beyond the Numbers: What This Means for Investors

The market reaction - with Nike up over 1% and Lululemon and Tapestry exceeding 2% in premarket trading - underscores the significance of JPMorgan's upgrade. These stocks have been under pressure recently, and this positive sentiment could trigger a broader rally in the consumer discretionary sector. However, investors should remember that market conditions remain dynamic. While the outlook appears promising, unexpected economic shocks or a resurgence of inflation could quickly derail the optimistic scenario.

Furthermore, the upgrades highlight the importance of focusing on companies with strong brands, robust online presences, and the ability to adapt to evolving consumer preferences. Nike, Lululemon, and Tapestry, having all demonstrated these qualities, are considered by JPMorgan to be exceptionally well-positioned to outperform their peers.

Looking Ahead

JPMorgan's upgrade is not a guarantee of future success, but it offers a compelling argument for a more optimistic view of the consumer goods sector. As inflation continues to moderate and consumer confidence slowly rebuilds, the stage appears set for a stronger second half of 2026, potentially rewarding investors who recognize the long-term potential of these brands. Investors are encouraged to monitor economic data closely and remain agile in adjusting their portfolios as circumstances evolve.