NIKE, Inc. (NYSE:NKE) has already lost more than 40% since January, while Bank of America analyst Lorraine Hutchinson spent much of 2026 arguing that the stock price already reflected the negative news. Her September 25 downgrade to Underperform signaled a clear change in that view. After Nike reported disappointing fiscal first-quarter results on October 1, BofA cut its price target again, reinforcing its bearish outlook. A single weak data point does not drive the shift. Instead, several developments now point to a turnaround that could take another year. Nike’s turnaround remains uncertain, but see the six other stocks competing for a place among 2026’s best turnaround opportunitie
A Lower Target And a Later Recovery
Bank of America downgraded Nike to Underperform from Neutral on September 25 and cut its price target from $47 to $30. Following Nike’s October 1 earnings report, the bank lowered its target again to $24. BofA had already warned of declining sales through FY27 and a delayed recovery. Nike’s subsequent guidance for a high-single-digit revenue decline in FY27 reinforced those concerns.
What Drove the Downgrade?
The biggest problem is weakness in Nike’s lifestyle category. Core products such as Dunk and Air Force 1 are losing momentum faster than new launches can make up for it. At the same time, North American wholesale shipments have not been supported by equivalent sell-through, which could put upcoming orders at risk as retailers become more cautious. Greater China revenue fell 26% on a currency-neutral basis in fiscal Q1 2027, while planned reductions in e-commerce partner distribution could create additional pressure. With earnings estimates falling, Nike’s valuation deserves a closer look. You may be surprised by what the numbers reveal about the stock’s current price.
Nike’s Discount Comes With Good Reason
On the surface, Nike looks like a bargain. INike trades at a substantial discount to its historical valuation, but its weaker earnings outlook makes that discount less compelling. This shows how much confidence investors have lost in its growth. Nike now expects fiscal 2027 revenue to decline by a high-single-digit percentage, with adjusted EPS of $1.15 to $1.35. This weaker outlook suggests the recovery could take longer than expected, while also raising questions about dividend coverage and valuation. To me, the discount reflects real risks, and I’d wait for signs that sales are stabilizing before buying.
Not all analysts share BofA’s view. Oppenheimer cut its price target to $52 but maintained an Outperform rating, pointing to early progress in collaborations and basketball.
Institutional interest in Nike has weakened, with hedge fund ownership declining from 71 funds at the end of Q1 2026 to 56 funds at the end of Q2 2026. Meanwhile, short interest reached 8.98% of float as of September 15, 2026, reflecting a meaningful level of bearish positioning heading into the earnings report.
Nike’s October 1 results reinforced concerns about a delayed recovery, prompting BofA to cut its price target further to $24. The stock could remain under pressure until sales show signs of stabilizing.
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