Heavy is the head that wear the crown The ''King of Trainers'' shares are down 45% year-to-date, reflecting sector-wide consumer concerns, but also increased worries of disintermediation by key brand suppliers like Nike, as they prioritise Direct to Consumer growth. We revisit the five key debates we think will be the biggest driver of the shares, update forecasts for latest trading and currency and reconfirming our Outperform rating. 01 What''s the demand outlook? We revisit sneakers'' economic cyclicality and analyse peer track records through downturns. With 1/3rd US exposure the picture is fairly benign, albeit inflation is squeezing consumers. Inflation is driving ASP increases too though. Our forecasts allow for a 7% decline in JD''s LFL volumes to 2023. 02 Does JD face disintermediation risk? Foot Locker''s reduced access to Nike product has spooked investors. Our analysis of range benchmarking in UK and US confirms JD''s access to products, including exclusives, remains industry-leading. Our Survey of Shoppers, and app downloads, also show the value of JD''s reach. 03 What''s the expansion opportunity? Our benchmarking shows that the company has scope to double its sports fashion footprint across Europe, USA, Israel, and APAC, looking only at countries where JD has an established presence. 04 What''s the MandA opportunity? With GBP1.2bn net cash on the balance sheet JD has the potential to execute significant MandA. It also has a generally strong record of value-creation: we estimate its US acquisitions since 2018 are now delivering a pre-tax ROCE of close to 40%. 05 What''s JD worth? On our macro-cautious forecasts JD is on just 8.2x PE ex-cash. The shares are pricing in a terminal EBIT margin less than half the level achieved in FY Jan-22 and compare favourably with most peers.