Nike's rating downgraded, recovery timeline extended

Investing.com - On Wednesday, analysts at JPMorgan Chase and Bank of America both cut their Nike stock rating to Neutral; the move followed the latest results from the athletic apparel giant, showing that its path back to growth will take longer than expected, and its target price was also slashed significantly.

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JPMorgan Chase analyst Matthew Boss downgraded the rating from Buy to Neutral, cutting the 2026 December target price from $86 to $52, citing worsening earnings outlook.

Boss lowered his 2027 fiscal year earnings per share forecast to $1.63, 28% below market consensus, and pushed back the timeline for Nike to reach a 10% operating profit margin from fiscal 2028 to fiscal 2029.

“We now extend the timeline for Nike to recover to a 10% operating profit margin to fiscal 2029,” Boss wrote, adding that at that margin level, earnings per share power is expected to be about $2.70.

Bank of America’s Lorraine Hutchinson also adjusted the rating to Neutral, cutting the Nike stock price target from $73 to $55, and lowering the 2027 fiscal year and 2028 fiscal year EPS forecasts to $1.60 and $2.00, respectively.

Hutchinson previously expected growth to return in the first quarter of fiscal 2027, but management’s guidance now indicates that sales will remain negative until before the third quarter of that fiscal year.

“As the sales turning point is now delayed by nine months, we believe there is little room for valuation multiple expansion,” she wrote.

The two analysts also pointed to ongoing weakness in Greater China and softness in the athletic apparel sector as the main concerns.

Nike’s stock fell about 10.5% in premarket trading to $47.29 per share.

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