"Business turnarounds take time": Evercore has withdrawn its recommendation to buy Nike stock
The bank's new target price implies a rise in the stock price of only 6% from current levels
Evercore pointed to Nike's protracted business turnaround / Photo: Shutterstock.com / Anya Keisha
Nike shares may face new challenges on the road to recovery, despite the company’s efforts to restart its business, CNBC reports, citing analysts at Evercore ISI. The investment bank downgraded the sports apparel and footwear manufacturer’s stock rating from “Outperform” to “In-line” (in line with the market) and lowered its price target from $57 to $46—just 6% above the company’s latest closing price (June 22).
“Major business pivots take time,” noted Evercore ISI analyst Michael Binetti. According to him, nearly two years after the start of the transformation, the company is still facing problems in its wholesale sales channel, a lack of significant product innovations, and difficulties in implementing its strategy. There is also a growing risk that Nike will have to signal to the market that it would be better to lower the consensus forecast to avoid a more serious scenario in which Nike would have to downgrade its forecast for the entire 2027 fiscal year, Binetti believes.
Since the beginning of the year, Nike’s stock has fallen by about 33%. The company’s results are being weighed down by tariffs imposed by the Donald Trump administration, as well as a continuing decline in sales in China—one of the brand’s most important markets, according to CNBC. Nike is trying to regain its market position, and to that end, it unveiled a new strategy at the end of 2024 that aims to boost sales through innovation, strengthening its position in key categories—such as running and basketball — and expanding collaboration with wholesale partners. After the pandemic, the company missed the trend toward the growing popularity of running, losing ground in the athletic footwear segment to competitors such as Asics and New Balance. Another reason for the decline was the shift away from athletic apparel toward lifestyle products and a broader consumer base.
According to LSEG data cited by CNBC, sentiment on Wall Street confirms Evercore’s view: roughly half of the analysts covering Nike stock recommend holding it (22 out of 41 have assigned a “Hold” rating).
This article was AI-translated and verified by a human editor
