Nike downgraded by Bank of America as turnaround delays persist

Bank of America analyst Lorraine Hutchinson has downgraded Nike from ‘neutral’ to ‘underperform,’ slashing the price target from $47 to $30. The downgrade follows Nike’s removal from the S&P 100 Index after a 78 percent stock decline, though the company remains in the broader S&P 500.

Hutchinson noted that Nike’s turnaround is taking longer than anticipated, predicting negative sales growth through fiscal 2027 and pushing a potential recovery into 2028. Key risks include weaker-than-expected sales in China, pressure in lifestyle and classic categories, and a promotional retail environment. The analyst also highlighted concerns regarding the sustainability of Nike’s dividend, noting that the payout ratio has exceeded 100 percent.

Looking ahead, the company is expected to focus on cost-cutting under new CFO David Denton. Nike is scheduled to release its first-quarter earnings report on October 1 and will hold an Investor Day on November 16 and 17.