BofA downgraded Nike's rating. Wall Street's pessimism toward the brand is at a 25-year high.

Bank of America downgraded its rating on sportswear manufacturer Nike from Neutral to Underperform and lowered its price target from $47 to $30, according to MarketWatch. Following this, Wall Street’s pessimism toward the company reached a 25-year high. BofA predicted that Nike’s sales and profits would continue to decline. The company’s stock has already lost about 44% since the beginning of the year.

“New products aren’t resonating with consumers, and competition in China has become tougher,” explained Bank of America analysts led by Lorraine Hutchinson, as quoted by MarketWatch, regarding the rating downgrade. Following their decision, Nike’s consensus rating reached its lowest level since at least 2001, according to Bloomberg: on a scale of 1 to 5, where 5 corresponds to “Buy” and 1 stands for “Sell,” it stands at 3.3, the agency notes.

Analysts also pointed to consumers’ continued caution when making purchases and Nike’s struggles with classic casual styles. The company is trying to bring new sneakers and other products to market more quickly to regain consumer interest. However, retailers will likely need more proof that these products will actually sell before they start actively stocking them, according to MarketWatch.

In China, Nike’s business is, according to BofA, “in a state of uncertainty.” Hutchinson expects price pressure to intensify due to a decline in online sales through partners. In Europe, the company is facing macroeconomic and competitive pressures, Bloomberg notes.

BofA expects Nike's sales to continue declining throughout fiscal year 2027, which ends in May. Analysts had previously anticipated a “turnaround in the spring.” They also cut their earnings-per-share forecasts for Nike for fiscal years 2027 and 2028 by 11% and 12%, respectively, according to MarketWatch.

BofA's new price target of $30 for Nike shares implies a decline of approximately 16% from current levels. The stock closed at $35.80 on September 25 and is trading near 13-year lows, having lost about 44% since the beginning of the year, MarketWatch notes.

According to data from MarketWatch, most analysts covering the company currently hold a neutral stance: the stock has 26 “Hold” ratings. Another 12 recommend buying the stock, while six recommend selling it.

The pressure on the brand is intensifying due to setbacks in the soccer sector: both teams in the World Cup final wore Adidas gear, and French soccer player Kylian Mbappé switched from Nike to On Holding. Converse, a Nike-owned brand, faced criticism in September over a failed advertising campaign, according to Bloomberg.

Nike is trying to restructure its business with a “Win Now” strategy under CEO Elliott Hill, who is working to make the company more athlete-focused following a decline in demand for casual footwear. However, since Hill’s appointment was announced more than two years ago, Nike’s stock has lost more than half its value, and the company’s market capitalization has shrunk by nearly $77 billion, Bloomberg reports.

This article was AI-translated and verified by a human editor