Bank of America Downgrades Nike to Underperform, Citing Rising Risks and Earnings Concerns
Bank of America has downgraded Nike's stock rating from neutral to underperform due to increasing risks in the company’s turnaround efforts. Analyst Lorraine Hutchinson cited concerns over earnings estimates being too high amid a struggling classics business and sluggish sales growth through fiscal year 2027. The bank also reduced its price target for Nike shares to $30, implying nearly 17% downside from recent levels. Nike's stock has already fallen by 47% in the past year due to macroeconomic challenges like tariff hikes affecting its 'Win Now' strategy and weak performance in key markets such as China. The bank expects continued sales declines through fiscal 2027, with intensified competition and promotional pressures further weighing on results. Hutchinson also noted that Nike’s dividend payout ratio is over 100%, prompting a reduction in the income rating for investors. Five analysts have downgraded Nike since early August, reflecting growing skepticism among Wall Street observers.
Tickers: $NKE
Topics: analyst report Nike sales growth stock downgrade underperform rating