UPDATE: JP Morgan Initiates Nike at Neutral on China Trends Overhang

JP Morgan initiated coverage on Nike

with a Neutral rating and a $100 price target. JP Morgan noted, "With long-term drivers in place (1) “Category Offense” transformation taking stride (buying & innovation centralized in '07), (2) apparel growth opportunity (5% market share vs. 30% in footwear) particularly in women's, and (3) GPM opportunity (DTC, innovation, pricing power) with a 290bps spread vs. 2010 peak, we see light at the end of the tunnel with a return to the long-term model likely by H14/FY15. That said, while input cost moderation in 2H13 is intriguing near-term, we believe China trends (10-11% of mix) could get worse before better (+47% 2-year stacked compares through YE vs. +25% in 1Q) with continued SG&A investments (DTC, China outlet growth) weighing on EPS." Nike closed at $99.41 on Tuesday.