Bank of America Downgrades Nike to Underperform

Bank of America retail analyst Lorraine Hutchinson downgraded Nike to Underperform from Neutral and reduced the company's price target from $47 to $30. Hutchinson warned that the company's business turnaround is taking longer than expected, pushing the anticipated recovery into 2028 and forecasting sales declines through 2027.

The downgrade follows a pressured classics business, weak sports demand in China, and lagging sell-through in North American wholesale. While some progress in product innovation has occurred, Hutchinson noted it has been overshadowed by weakness in larger casual categories. Consequently, she cut fiscal 2027 and 2028 earnings estimates by 11% and 12%, respectively, and observed that the dividend payout ratio now exceeds 100%.

Nike shares fell 2% in New York premarket trading following the report. Hutchinson indicated that the company's valuation faces downside risk as macro pressures build and the recovery timeline extends.