TLDR
- Nike shares fell more than 1% premarket Tuesday, putting the stock on track for a fresh 13-year low.
- Berenberg downgraded Nike to Sell from Hold and cut its price target to $27.50 from $49.
- Nike stock is down 47% in 2026 and 81% below its November 2021 record high.
- Only 26% of analysts covering Nike rate it a Buy, the lowest share in at least 20 years.
- Berenberg sees fiscal 2027 EPS at $1.08, well below prior estimates, with margin risk still unresolved.
Nike stock dropped more than 1% in premarket trading Tuesday. The move put shares on pace to close at their lowest level in 13 years.
The decline followed a fresh downgrade from Berenberg. Analysts cut their rating to Sell from Hold and slashed their price target to $27.50 from $49.
Analyst Nick Anderson said Nike has essentially accepted a smaller place in the sportswear market. He called the shift in market structure “irreversible” in a note published Tuesday morning.
The downgrade comes just days after Nike’s fiscal first-quarter earnings last Thursday. The company’s outlook for fiscal 2027 disappointed investors, with management guiding for a high-single-digit percentage revenue decline through May 2027.
Nike stock has had a rough year by any measure. Shares are down 47% in 2026 alone.
Zoom out further and the picture looks worse. The stock sits 81% below its record closing high from November 2021.
Performance Business Holds Up, Sportswear Lags
Berenberg’s analysts noted some bright spots in the results. Running, football, North American basketball, tennis and golf all posted double-digit sales growth in the quarter.
But the broader sportswear category, which makes up just under half of group sales, fell by a low-double-digit percentage. Jordan brand sales dropped by a mid-teens percentage, dragging on the overall number.
That weakness is a big reason behind Nike’s guidance for a high-single-digit sales decline in fiscal 2027, according to Berenberg. China remains the toughest market of all.
Despite being central to Nike’s “Win Now” turnaround plan since December 2024, Chinese sales are expected to shrink for at least another quarter. Berenberg said rebuilding the brand there will take years, not quarters.
Estimates Get Cut Across the Board
Berenberg lowered its sales estimates for Nike by 6.5%, 11% and 13% for fiscal years 2027 through 2029. EPS estimates were slashed even harder, down 38%, 46% and 34% over the same stretch.
The firm now expects fiscal 2027 EPS of just $1.08. It also flagged that Nike stayed quiet on gross margin guidance for fiscal 2027, a silence Berenberg reads as a warning sign.
Management’s restructuring plan, known as Pace, isn’t expected to help much until fiscal 2029. The plan targets $2.5 billion in savings through fiscal 2031, but most of that benefit is backloaded to 2029 and 2030.
Meanwhile, $1 billion in pre-tax charges are front-loaded, adding near-term pressure. Berenberg called this combination a tough setup for investors hoping for a quick turnaround.
The firm’s new $27.50 price target applies Adidas’s 20-year average price-to-earnings multiple to Nike’s fiscal 2029 EPS estimate. Berenberg argues Nike’s current premium valuation versus rivals no longer makes sense.
Wall Street sentiment has turned sharply cautious. Just 26% of analysts covering Nike currently rate the stock a Buy.
That’s the lowest proportion in at least 20 years, according to FactSet data. Nike did not immediately respond to a request for comment on the downgrade.
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