Proactive Investors - JD Sports Fashion PLC (LSE:LON:JD.) shares topped the FTSE 100 risers on Monday morning, boosted by an upgrade from Deutsche Bank (ETR:DBKGn), which removed its 'sell' rating.
There was a strong reaction to the third-quarter trading update, with the stock falling 15% on top of a 20% decline since the interim results.
Guidance for profits at the low end of the previous outlook range was below consensus, "however the update shook what was already somewhat fragile confidence", says analyst Alison Lygo, with US like-for-like sales turning negative having a "particular impact".
Her take is a reinforcement of two of existing views: firstly, "that JD is more 'in the pack' in US retail than has perhaps been appreciated, and secondly, that there may be room for improvement, and reason to be cautious, on near term visibility of trading".
Looking back, a profit warning in January was blamed on elevated promotional activity and Lygo said "we do question where the tipping point is for maintaining discipline on promo intensity for a retailer of 3P branded product, and how trading strategy for FY26 will evolve".
She upgraded to a 'hold' rating and kept her target price unchanged at 110p, compared to a last close price of 93.46p.