Two large Wall Street banks downgraded Nike on Wednesday, projecting a longer road to margin and earnings recovery after the sportswear company reported results that prompted analysts to recalibrate expectations.
JPMorgan analyst Matthew Boss reduced his recommendation from Overweight to Neutral and dramatically lowered his December 2026 price target to $52 from $86, citing what he described as a deteriorating earnings outlook. Boss cut his fiscal 2027 EPS estimate to $1.63, which he noted is 28% below consensus, and moved out the expected timing for Nike to reach a 10% operating margin from fiscal 2028 to fiscal 2029.
"Our timeline for NKE to return to a 10% operating margin now extends to FY29," Boss wrote, projecting EPS power of roughly $2.70 at that margin profile.
Bank of America's Lorraine Hutchinson also lowered her rating to Neutral. She trimmed her price target on Nike shares to $55 from $73 and reduced her fiscal 2027 and 2028 EPS forecasts to $1.60 and $2.00, respectively. Hutchinson had been expecting growth to resume in the first quarter of fiscal 2027, but management guidance now points to negative sales through the third quarter of that year.
"With the sales inflection now nine months away, we see little room for multiple expansion," she wrote.
Both analysts highlighted continued weakness in Greater China and softness within the Sportswear segment as important headwinds. The market reaction was immediate: Nike shares were down about 10.5% in premarket trade, trading near $47.29 per share.
Separately, a proprietary stock selection tool mentioned in market commentary evaluates Nike among thousands of companies each month using more than 100 financial metrics. That tool's materials note it uses AI to identify stocks with attractive risk-reward profiles and has previously highlighted winners such as Super Micro Computer (+185%) and AppLovin (+157%). The commentary also invites investors to check whether Nike appears in any of the tool's strategies or if other opportunities in the sector are preferable.
Context and implications
The simultaneous downgrades and sizable cuts to price targets reflect a reassessment of Nike's margin trajectory and near-term sales outlook. Analysts pushed their margin recovery timeline out by roughly one fiscal year and lowered EPS projections for upcoming fiscal periods, indicating more constrained upside in earnings than previously modeled.
Investors should weigh these revised expectations against the risks tied to regional performance and product category demand as the company works toward restoring operating leverage.