Bank of America analyst Lorraine Hutchinson has expressed concerns about Nike's future performance, indicating that the company is facing a challenging path to recovery. The downgrade from neutral to underperform comes with a lowered price target of $30, down from $47, indicating a nearly 17% downside from the stock's recent closing price.
Hutchinson highlighted that Nike's innovation efforts are being overshadowed by struggles in its classic product lines, which are experiencing sluggish sales. The analyst now anticipates negative sales growth through fiscal year 2027, a shift from her previous expectation of a spring recovery.
Additionally, she has reduced her earnings per share estimates for fiscal years 2027 and 2028 by 11% and 12%, respectively. The report also notes that Nike's stock has already fallen 47% over the past year, exacerbated by macroeconomic challenges and increased competition, particularly in the critical Chinese market.
With five analysts downgrading the stock since August, the sentiment on Wall Street appears increasingly negative, with 26 out of 44 analysts now holding a neutral rating on Nike