TLDR
- Nike shares declined over 1% in Tuesday’s premarket session, heading toward their lowest close in 13 years.
- Berenberg slashed Nike’s rating to Sell from Hold while cutting the price target from $49 to $27.50.
- The stock has tumbled 47% year-to-date in 2026 and sits 81% beneath its November 2021 peak.
- Analyst Buy recommendations for Nike have fallen to 26%, marking the weakest support in two decades.
- Berenberg projects fiscal 2027 EPS of $1.08, sharply below consensus, citing unresolved margin pressures.
Nike stock retreated more than 1% during Tuesday’s premarket hours. The decline positioned the shares to record their weakest closing price in over a decade.
The selloff intensified after Berenberg issued a fresh downgrade. The firm lowered its rating to Sell from Hold while reducing its price objective from $49 down to $27.50.
Berenberg analyst Nick Anderson stated that Nike has effectively acknowledged a diminished role within the athletic apparel industry. He characterized the structural market transformation as “irreversible” in Tuesday morning research commentary.
This downgrade arrived mere days following Nike’s fiscal first-quarter results released last Thursday. The company’s fiscal 2027 forecast fell short of investor expectations, with executives projecting revenue will contract by a high-single-digit percentage through May 2027.
Nike shares have endured substantial pressure throughout the current period. The stock has plummeted 47% during 2026.
A broader perspective reveals even steeper losses. Shares currently trade 81% below their all-time closing peak established in November 2021.
Athletic Performance Segment Shows Strength While Lifestyle Products Stumble
Berenberg’s research team identified several positive elements within the quarterly report. Running, soccer, North American basketball, tennis and golf categories each delivered double-digit revenue expansion during the period.
However, the general sportswear segment, representing nearly half of total company revenue, contracted by a low-double-digit percentage. Jordan brand revenue declined by a mid-teens percentage, weighing on consolidated performance.
This category weakness represents a primary driver behind Nike’s projected high-single-digit revenue contraction for fiscal 2027, Berenberg noted. The China market presents the most significant challenge.
Despite China serving as a cornerstone of Nike’s “Win Now” recovery strategy launched in December 2024, revenue in the region is anticipated to decline for at least one additional quarter. Berenberg warned that restoring brand strength in China will require years rather than quarters.
Financial Projections Slashed Dramatically
Berenberg reduced its revenue forecasts for Nike by 6.5%, 11% and 13% across fiscal years 2027 through 2029. Earnings per share projections were cut even more severely, declining 38%, 46% and 34% respectively across the same timeframe.
The firm currently anticipates fiscal 2027 EPS will reach only $1.08. Berenberg also highlighted that Nike provided no gross margin guidance for fiscal 2027, interpreting this omission as a cautionary signal.
The company’s restructuring initiative, called Pace, isn’t projected to deliver meaningful benefits until fiscal 2029. The program targets $2.5 billion in cost reductions through fiscal 2031, though the majority of savings are weighted toward 2029 and 2030.
Conversely, $1 billion in pre-tax restructuring charges will hit results in the near term, creating additional headwinds. Berenberg described this timing mismatch as a challenging environment for investors seeking rapid improvement.
The firm’s revised $27.50 price objective applies Adidas’s 20-year historical price-to-earnings ratio to Nike’s fiscal 2029 earnings forecast. Berenberg contends Nike’s valuation premium relative to competitors is no longer justified.
Analyst sentiment on Wall Street has shifted decidedly negative. Only 26% of analysts tracking Nike currently maintain Buy ratings on the shares.
This represents the smallest proportion of bullish recommendations in at least two decades, based on FactSet records. Nike did not immediately provide comment regarding the downgrade.
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