Nike stock is having its worst year since 1993. An analyst advises staying away from it.
33 years ago, the issue was basketball player Michael Jordan's decision to retire. Now, it's a brand
Nike's "Win Now" strategy has not yet led to a rise in its stock price / Photo: Shutterstock.com / Tada Images
Analysts at Truist Securities have withdrawn their “buy” recommendation on shares of sportswear manufacturer Nike, warning investors that the company may face new challenges amid a softening athletic footwear market and intensifying competition. The same fate befell shares of retailer Dick’s Sporting Goods. Moreover, Nike’s stock has posted its worst performance this year since 1993, Bloomberg notes.
Details
Truist downgraded its rating on Nike and Dick’s Sporting Goods shares from “Buy” to “Hold,” CNBC reported. Truist also lowered its price target for Nike shares from $47 to $42, which, however, still implies an increase of about 6% relative to the closing price on August 25. The price target for Dick’s shares was cut in half—from $270 to $135—leaving nearly 9% upside potential.
“We were more optimistic earlier, but now we believe the negative factors are too strong,” CNBC quotes Truist analyst Joseph Chivello as saying. Nike’s stock has fallen 39% this year as sales of Jordan-branded products have plummeted and the company’s athletic apparel division has struggled to compete with companies such as On Holding and Deckers Outdoor, which owns the Hoka brand, Bloomberg reports. Nike’s stock could post its worst annual performance since 1993, the agency notes.
The downgrade of Dick’s followed a nearly 31% plunge in its stock price in a single day on August 25. This drop marked the worst day for the company’s stock in its entire history of trading on the exchange, according to CNBC. Investors were disappointed by the quarterly earnings report, which fell short of expectations.
Truist notes the close connection between the two companies’ businesses: Nike footwear accounts for about 35–40% of Dick’s purchases. Therefore, Nike’s challenges in attracting customers and its reduced presence in brick-and-mortar stores could pose additional risks for Dick’s. “If future Nike product launches fail to stimulate consumer demand, Dick’s will likely face additional challenges,” Chivello noted.
What Other Analysts Are Saying
“Nike’s stock has fallen sharply as the brand has lost ground to more agile competitors, and its own lineup of groundbreaking new products isn’t keeping pace with them,” said David Wagner, a portfolio manager at Aptus Capital Advisors, in an interview with Bloomberg. “We prefer to hold shares in innovative companies rather than bet on a long-established leader making a comeback,” Wagner added.
Nike is undergoing a strategic restructuring that began following a change in CEO at the end of 2024 and has been dubbed "Win Now." The plan aims to overcome a prolonged sales slump, stabilize market share, and refocus the brand on sports such as basketball and running, according to Bloomberg. But the plan has not provided a quick fix: the company has lost half its value, and its stock price has fallen to near its lowest level since 2014. The decline in 2026 will mark the fifth consecutive year of losses for investors, the agency reports.
"Investors don't yet believe in a recovery," said Brian Mulberry, chief market strategist at Zacks Investment Management, as quoted by Bloomberg. The plan has not yet shown tangible progress, and a turning point will likely come in another three or four quarters, Malberry believes.
"Nike needs to show that it has innovative products capable of competing with all the new entrants," Bloomberg quotes Michael Obukhovsky, chief investment officer at Merlin Asset Management, as saying. Investors are waiting for sustained sales growth before they start investing in the company’s stock again, the analyst added.
What about the stocks?
Truist’s recommendation on Nike is in line with the analyst consensus: according to MarketWatch, 24 out of 37 analysts recommend holding the company’s stock, 14 recommend buying it, and three more analysts recommend selling it. In the case of Dick’s, the bank’s position is similar: 13 out of 30 analysts give a “hold” recommendation. Sixteen analysts recommend buying the retailer’s stock, while one more advises selling it.
This article was AI-translated and verified by a human editor
