Truist Securities Downgrades Nike Shares to Sell

Truist Securities downgraded Nike Inc. shares from Hold to Sell on Thursday, citing an inflated valuation and systemic risks across the company's portfolio. Retail analyst Joseph Civello maintained a $29 price target, arguing that a recent stock rally reflects positive sector rotations rather than an improvement in underlying fundamentals.

The downgrade follows fading demand for the Jordan franchise, with several recent launches selling below retail prices, and deepening weakness in the Chinese market. Civello noted that Nike's valuation of 27 times second-year forward earnings is significantly higher than the peer average of 15 times.

Nike CFO Dave Denton recently lowered the outlook for China, characterizing previous internal expectations as overly optimistic and predicting that performance in the region will worsen through the end of the year.