TLDR
- RBC Capital Markets downgraded Nike to Sector Perform from Outperform, cutting its price target to $50 from $70
- RBC trimmed FY27 and FY28 EPS estimates by 9% and 13%, sitting roughly 2% below Wall Street consensus
- NKE stock fell ~1.6% in pre-market trading, hovering near its 52-week low of $41.35
- Citi also cut its price target to $47 from $53, keeping a Neutral rating
- Nike has lost over 4 percentage points of sports footwear market share since 2023
Nike (NKE) stock slipped around 1.6% in pre-market trading on Wednesday after RBC Capital Markets downgraded the stock and slashed its price target from $70 to $50.
RBC analyst Piral Dadhania moved Nike from Outperform to Sector Perform, pointing to a turnaround under CEO Elliott Hill that is moving more slowly — and on a narrower front — than the bank had expected.
The stock was trading around $43.95, just above its 52-week low of $41.35 and less than half its 52-week high of $80.17.
Dadhania cut RBC’s FY27 EPS estimate by 9% and FY28 by 13%, putting the firm about 2% below Wall Street consensus on both years.
“Nike turnaround under Elliott Hill is making progress, but slower and narrower than we were anticipating,” Dadhania wrote in the note.
RBC said the FIFA World Cup 2026, ongoing inventory cleanup, and a lack of new growth engines are unlikely to produce a sustained revenue lift for the rest of calendar 2026.
The downgrade wasn’t the only bearish signal of the day. Citi held its Neutral rating but trimmed its own price target to $47 from $53, flagging concerns that near-term consensus estimates may still be too high.
Market Share Under Pressure
Nike has lost over 4 percentage points of sports footwear market share since 2023. On Running, New Balance, Hoka, and Asics have all picked up ground at Nike’s expense.
In women’s apparel, Lululemon, Alo Yoga, and Vuori now hold stronger premium positions. In China, Nike’s revenues fell 10% year over year in the most recent quarter.
By comparison, Adidas stock gained roughly 70% over a period in which NKE fell approximately 50% following Hill’s appointment in October 2024.
RBC puts Nike’s three-year revenue growth outlook at around 3%, below the sector average of 6% and well behind Adidas at 8%.
Wholesale Complexity
RBC flagged a widening gap between wholesale sell-in and direct-to-consumer sell-out, particularly in North America. Dadhania called full-price DTC recovery “the key unlock” and expects improvement through FY27 as comparisons ease.
The Dick’s Sporting Goods acquisition of Foot Locker adds another layer of complexity. The combined entity accounts for an estimated 11% of Nike’s total revenues and 20% of its wholesale business. RBC expects the combined buyer to cut around 30% of underperforming styles.
RBC’s $50 price target is based on a WACC of 8.5% and a 2.5% terminal growth rate, implying roughly 15% upside from current levels. However, Dadhania warned that if Nike’s valuation were to normalize to sector average multiples, fair value could fall to $34–$38.
NKE has traded below both its 50-day and 200-day moving averages for months, and Q4 fiscal 2026 earnings are scheduled for June 30.
Dadhania added: “We are cautious on credibility of any financial targets,” ahead of a Capital Markets Day Nike has flagged for Fall 2026.
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