Nike down as BofA turns bearish, says 'risks are rising'
NKE•Nike shares fell 1.3% after BofA Global Research downgraded the stock to underperform from neutral and cut its price target to $30 from $47. The analyst expects negative sales growth through fiscal 2027 and sees downside risk to earnings estimates and valuation.
1. Downgrade and outlook
Nike shares were down 1.3% at $35.54 in early Friday trading, an over 12-year low, after BofA Global Research downgraded the company to underperform from neutral. Analyst Lorraine Hutchinson cut her price target to $30 from $47, citing downside risk to earnings estimates and valuation as Nike's turnaround takes longer. She now anticipates negative sales growth through fiscal 2027, compared with her prior view of a spring inflection.
2. Business pressures
Hutchinson said Nike's innovation continues to be overshadowed by a pressured classics business, while category and macro pressures build. The revised target is based on a 16-times price-to-earnings ratio, down from 22 times and aligned with the peer average. In June, Nike flagged a prolonged turnaround as persistent weakness in China and a cautious outlook eclipsed a modest fiscal fourth-quarter revenue beat.
3. Ratings and performance
Thirteen of 44 brokerages rate Nike shares strong buy or buy, 25 rate them hold and six rate them sell; the median price target is $44.80, per LSEG data. Nike shares are down about 44% year to date, compared with a roughly 5% decline in the S&P 500 Consumer Discretionary sector and a 13% gain in the S&P 500.
