Bank of America downgraded Nike to Underperform from Neutral and cut its price target to $30 from $47, in a note dated September 25, six days before Nike’s fiscal 2027 first-quarter earnings. Analyst Lorraine Hutchinson pushed back her expectation for a sales recovery from spring 2027 to fiscal 2028, widening the gap between analysts over how long Nike’s turnaround under CEO Elliott Hill will take.
Hutchinson cut earnings-per-share estimates by 11 percent to $1.43 for fiscal 2027 and by 12 percent to $1.87 for fiscal 2028, about 14 percent below fiscal 2027 consensus. That $1.43 estimate implies a dividend payout ratio of roughly 107 percent, raising questions about how long Nike can sustain its current capital-return policy if earnings fail to recover.
China revenue fell 17 percent in Nike’s most recent fiscal fourth quarter, and wholesale partners in North America are still working through excess inventory, delaying reorders. Classic franchises such as Air Force 1 and Dunk continue losing ground faster than newer product lines can offset, per Hutchinson.
Not every analyst shares Bank of America’s severity. Oppenheimer trimmed its target to $52 from $60 while keeping an Outperform rating, citing early improvement in collaborations and basketball product. Bank of America’s note follows a similarly bearish call from Morgan Stanley this month, though consensus price targets still sit materially above BofA’s $30.
Nike shares have fallen more than 40 percent since January. The company was removed from the S&P 100 this week as its market capitalization fell below the index’s typical range, and the stock trades close to its 52-week low.
Nike reports fiscal first-quarter results Thursday, October 1, after the US market close. Consensus expects revenue of about $11.3 billion and adjusted earnings per share of $0.44, a figure that will show whether full-year margin targets survive another quarter of China weakness and stalled North American reorders.
