New York, NY – The outlook for Nike Inc. shares on Wall Street has taken a bearish turn as the sportswear company warned of a slower year ahead, prompting analysts to rethink their stance on the stock. Following the disappointing guidance from Nike, several brokers, including JPMorgan Chase & Co, Morgan Stanley, and UBS Group AG, have shifted from their once bullish positions to a more cautious outlook. As a result, the consensus rating for Nike dropped to a more than six-year low of 3.8 out of five, as competition from the likes of Adidas AG continues to challenge the sneaker giant’s market position.
Analysts have expressed concerns about fundamental trends at Nike, with UBS analyst Jay Sole noting that the company’s lifestyle business requires a major reset. Despite once being a favored pick among Wall Street analysts, Nike has seen a decline in support in recent months as competitors like Adidas and On Holding AG gain ground with innovative styles. The downward trend in sentiment was reinforced by Williams Trading analyst Sam Poser, who advised investors to sell the stock, citing a potential turnaround not expected until 2026 or later.
The negative sentiment towards Nike was further exacerbated by a disappointing set of earnings, leading to a 21% drop in shares and the stock’s largest intraday decline in over 23 years. While some analysts like Bank of America Corp.’s Lorraine Hutchinson are optimistic about Nike’s new estimates being achievable, others like Stifel’s Jim Duffy have downgraded the stock, citing uncertainty in the consumer discretionary sector. Raymond James analyst Rick Patel also expressed doubts about Nike’s revenue potential, highlighting macroeconomic challenges, unfavorable channel mix, and volatility in China as key concerns.
Barclays Plc analyst Adrienne Yih downgraded Nike shares, emphasizing the need for greater evidence that the company’s strategic initiatives are driving renewed sales growth. As investors navigate through the uncertainty surrounding Nike’s future prospects, questions loom over the long-term health of the iconic brand, dampening overall market sentiment towards the sportswear giant. With analysts divided on the path forward for Nike, the company faces an uphill battle to regain the confidence of investors and analysts alike in the midst of changing market dynamics.