NKE Stock Is Down 31% This Year — But Wall Street Pessimism Isn't Over Yet

• Piper Sandler stated in its note that Nike is still a quarter away from registering gains in the athletic apparel and shoes segment, even though it expects the performance momentum across the industry to continue.
• The firm also expressed concerns that Nike could face increasing competition in the athleisure segment.
• Piper Sandler stated that this segment is becoming too saturated, with frequency metrics inching toward a peak.

Nike Inc. (NKE) shares are down nearly 31% this year so far, but analysts at Piper Sandler see further downside for the stock amid concerns about the company’s rebound.

According to TheFly, Piper Sandler downgraded Nike to ‘Neutral’ from ‘Overweight’ while trimming the price target to $50 from $60.

This is Piper Sandler’s second price target cut for the NKE stock this month, after the firm trimmed its price target to $60 from $75 following Nike’s third-quarter (Q3) results.

Why Is Piper Sandler Concerned?

Piper Sandler stated in its note that Nike is still a quarter away from registering gains in the athletic apparel and shoes segment, even though it expects the performance momentum across the industry to continue.

The firm also expressed concerns that Nike could face increasing competition in the athleisure segment. Piper Sandler stated that this segment is becoming too saturated, with frequency metrics inching toward a peak.

The firm’s analysts also believe that Nike lacks the innovation needed to fill the volume gap in the classics segment.

While announcing its Q3 results in March, Nike forecast a revenue decline in Q4, stating it expects a 2% to 4% year-on-year (YoY) decline. This implies revenue of $10.66 billion and $10.88 billion in Q4, both lower than the consensus estimate of $11.3 billion, according to Fiscal.ai data.

Notably, Wall Street remains concerned about Nike’s prospects. Earlier this month, analysts at JPMorgan flagged time-consuming turnaround efforts while trimming fiscal 2027 and 2028 earnings estimates below consensus.

Goldman Sachs downgraded Nike to ‘Neutral’ from ‘Buy’ and cut its price target to $52 from $76, citing increased caution around the company’s recovery timeline following its Q3 results, with particular concern over continued pressure in the Chinese market.

Analysts at Wells Fargo stated that Nike’s Q3 results had more negatives than positives, adding that the international market is taking longer to rebase and is requiring a deeper reset.

Barclays analysts said Nike could take four quarters to return to growth in the Greater China market, while UBS analysts expressed concern that investors may question whether the bad news for the company is fully priced in.

Nike CEO Says Greater China Turnaround Taking Longer

Nike CEO Elliott Hill stated that the company’s turnaround strategy in Greater China is still in its early stages of a comeback, adding that the efforts are taking longer to bear fruit than he would like.

After a 7% decline in sales in the Chinese market in Q3, Nike said it expects a 20% decline in Q4.

“The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of Nike,” Hill said.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Nike trended in the ‘neutral’ territory at the time of writing.

One bearish user stated that the sneaker market is “dead stock.”

NKE stock is down 31% year-to-date and 26% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 24% over the past 12 months, while the Vanguard Total Stock Market Index Fund ETF (VTI) is up 25%.

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