"Outlook Uncertain": Wall Street Revises Nike Estimates Following Earnings Report
Wall Street analysts generally did not downgrade their recommendations on Nike shares, but they did lower their price targets / Photo: frantic00 / Shutterstock.com
On July 1, at least 13 analysts unanimously lowered their price targets for shares of Nike, the sneaker and athletic apparel manufacturer, but most maintained their previous recommendations following the company’s earnings release, according to data from TipRanks and MarketScreener. The quarterly report, which highlighted weak sales in China, did not change investment bank analysts’ long-term outlook on the sports retailer, but it did prompt them to lower their financial forecasts for the company’s stock due to a slower recovery in certain business segments.
During trading on July 1, Nike's stock jumped nearly 5 percent: Thomas Hayes, chairman of Great Hill Capital, attributed this to the fact that much of the bad news had already been factored into the company's stock price.
What Analysts Are Saying
— The only exception was KeyBanc—its analysts downgraded Nike’s stock rating from “Overweight” to “Sector Weight” even before the company’s earnings report was released, thereby withdrawing their buy recommendation on the stock.
— Guggenheim and Jefferies maintained their “buy” recommendations even after cutting their price targets for Nike shares more significantly than other Wall Street analysts—from $74 to $60 per share and from $90 to $75, respectively. This is 39% and 74% higher, respectively, than the closing price on July 1. Jefferies’ target price remains the highest among analysts who have revised their estimates for Nike shares. The investment bank notes that the sports retailer’s fourth-quarter results exceeded expectations and showed “the first signs of a strengthening core business,” according to TipRanks. As Jefferies notes, Nike continues to work on turning around its business in China, while its Performance division continues to expand. At the same time, the Sportswear category (casual athletic apparel and footwear) and Jordan Streetwear (the brand’s line focused on casual fashion and sneakers) “remain the main source of pressure and will take time to recover,” analysts say.
— Bernstein also maintained its “buy” rating but lowered its price target for Nike shares from $80 to $72 per share. This is 67% higher than Wednesday’s closing price. The sporting goods manufacturer continues to face short-term challenges, the investment bank notes in a report cited by Finanzen.net. At the same time, Bernstein has become more optimistic about Nike’s fiscal year 2027—analysts expect that innovation, cost control, increased full-price sales, and margin recovery will support the sports retailer’s results. The investment bank considers Nike’s Investor Day, scheduled for November, to be the next key catalyst for the company’s stock.
— Barclays reaffirmed its “Overweight” rating on the company’s stock, though it lowered its price target from $67 to $52 per share. According to the bank’s analysts, Nike is making progress, but the recovery is taking longer than expected, TipRanks reports. Sales in Greater China and the EMEA region (Europe, the Middle East, and Africa) remain weak, and discount sales remain high in some markets. Nevertheless, Barclays believes the company is building a healthier business that should support earnings growth over time.
— Most banks with neutral recommendations on Nike stock have also lowered their price targets: JPMorgan lowered its target price for the sports retailer’s shares from $52 to $47 per share, UBS from $50 to $48, BofA Securities from $55 to $47, Goldman Sachs from $46 to $42, Citigroup from $47 to $45, Wells Fargo from $45 to $40, and Piper Sandler, RBC, and Stifel from $50 to $45.
— Ahead of its earnings report, JPMorgan cut its earnings per share forecast for Nike for fiscal year 2027 from $1.63 to $1.58, while the Wall Street consensus is around $1.8, according to TipRanks. This adjustment was based on the bank’s own analysis of Nike’s sales channels: analysts observed a slowdown in momentum toward the end of the quarter in several regions and concluded that Nike’s future outlook remains “uncertain.”
— Piper Sandler believes that Nike’s two largest divisions—Sportswear and Jordan, which account for about half of the company’s sales—will remain under pressure throughout fiscal year 2027, according to TipRanks. Although Nike’s management expects the situation to improve later this year, Piper Sandler believes that demand remains too uneven to count on a rapid recovery for the business.
According to MarketWatch, of the 39 analysts tracking the sportswear manufacturer’s stock, 22 have a neutral rating (Hold), 15 recommend buying the stock (Buy and Overweight), and only two recommend selling (Sell). The Wall Street consensus price is $51.3, which is nearly 19% higher than Wednesday’s closing price. Nike shares rose 4.9% to $43.1 during trading on July 1.
What Was in the Report
Nike's total revenue for the fourth quarter of fiscal year 2026 declined by 1% compared to the same period last year, totaling $10.97 billion. However, analysts surveyed by LSEG had expected an even sharper decline and had forecast sales of $10.86 billion.
Sales in Greater China fell 17% on a comparable-currency basis. And Nike’s management warned of a further decline in revenue in the first half of fiscal year 2027 due to weak demand, excess inventory, and import duty pressures.
This article was AI-translated and verified by a human editor
