Nike gets downgrades from a few Wall Street shops due to dim sales outlook
Nike issued lackluster sales guidance , prompting some of the biggest Wall Street shops to downgrade the stock. The sportwear company posted on Tuesday better-than-expected results for the fiscal third-quarter, but shares fell nearly 11% on the a dimmer-than-expected sales outlook. Nike said it expects sales to drop between 2% and 4% in fiscal fourth quarter as its new corporate strategy fails to immediately improve appetite for the brand’s products across various markets. The estimate came in well below Wall Street’s consensus expectation of a 1.9% increase, LSEG data shows. The apparel giant also expects sales to drop by a low single-digit percentage over the rest of the calendar year, led by growth in North America and offset by declines in China — a forecast that underwhelmed the Street. NKE YTD mountain NKE year to date “We thought improved performance product innovation and lapping Win Now actions would result in a return to growth in 1Q27; instead, management has initiated guidance for sales to remain negative into 3Q27,” Bank of America analyst Lorraine Hutchinson said Wednesday in a note to clients. “Strong results in running and NA were the reasons for our patience but with the sales inflection now nine months away, we see little room for multiple expansion, leading to our downgrade to Neutral.” Bank of America downgraded Nike to neutral from buy. It has also lowered its price target on shares to $55 from $73, implying about 4% upside from Tuesday’s close. The bank also slashed its earnings per share estimates on the stock. In late 2024, CEO Elliott Hill debuted the “Win Now” roadmap to turnaround Nike’s slumping sales and stagnating brand momentum. The plan called for Nike to strike new deals with wholesalers, make strides in sport performance innovation and push into critical categories such as running and basketball. But the plan are has taken longer to materialize than some investors expected, contributing to bearish sentiment on the Street. Goldman Sachs also lowered its rating on the stock to neutral from buy and slashed its price target to $52 from $76. “Sportswear momentum remains muted, franchise management and inventory reset actions remain ongoing, and EMEA and China remain under particular pressure. With macro headwinds intensifying, we believe more patience will be needed as NKE executes its strategic plan,” wrote analyst Brooke Roach. JPMorgan echoed the negative sentiment surrounding Nike’s turnaround. “While NKE has begun to realize initial greenshoots from its Sport Offense strategy within North America and the running category, the balance of the portfolio including International regions (EMEA, Greater China, and APLA) continue face actions to reset the marketplace and sell-through results remain challenged globally, resulting in an elongated timeline for the model to reach an inflection to revenue growth and a return to double-digit operating margins,” analyst Matthew Boss said Wednesday in a note to clients. JPMorgan downgraded the stock to neutral from overweight. Nike shares have fallen 17% since the beginning of this year, underperforming the overall market.