Nike (NKE) shares have come under pressure on Friday after a Bank of America analyst, Lorraine Hutchinson, downgraded the athletic footwear company to underperform.
In her research note, Hutchinson lowered her price target on NKE to $30, signalling potential downside of another 15% from current levels.
Her bearish call is particularly significant given Nike stock has already been a disappointment for investors in 2026, currently down some 45% versus its year-to-date high.
Why BofA downgraded Nike stock today
Hutchinson’s bearish view on NKE shares is rooted in expectations of prolonged revenue weakness across major athletic footwear segments.
She now expects negative top-line growth through the coming year – pushing out any meaningful operational turnaround into fiscal 2028.
Although Nike Inc continues to launch fresh product innovations, these efforts are being largely overshadowed by sharp declines in core lifestyle franchises and classic footwear lineups.
Plus, wholesale channel trends in North America reflect severe inventory risks.
Sell-through performance has failed to match wholesale shipments, forcing cautious retailers to re-evaluate forward order books, she added.
Compounded by a 17% crash in Greater China sales during recent quarters, Nike’s broader revenue base remains fundamentally strained.
BofA lowers estimates for Nike’s 2027 and 2028 earnings
In her report, the Bank of America analyst also signaled growing risks regarding Nike’s financial profile, earnings visibility, and dividend durability.
She reduced her fiscal 2027 and fiscal 2028 earnings per share (EPS) estimates by 11% and 12%, placing its fiscal 2027 EPS projection of $1.43 roughly 14% below consensus expectations.
With earnings under pressure, Nike’s projected dividend payout ratio rises to a concerning 107% for fiscal 2027, prompting BofA to downgrade its income rating due to risks that the payout may remain flat or face restructuring.
Consequently, Hutchinson lowered Nike shares’ valuation multiple to about 16x earnings, aligning it closer to broader peer group averages.
NKE shares in focus ahead of earnings on October 1
As Nike Inc. prepares to release its fiscal Q1 earnings report on October 1, Wall Street sentiment is becoming increasingly divided over how quickly management can engineer a turnaround.
While consensus estimates anticipate a revenue decline of 2.4% to $11.4 billion, BofA’s research indicates that profit margins and bottom-line stability will remain entirely reliant on aggressive cost reductions and gross-margin controls rather than organic demand.
With e-commerce restructuring adding near-term top-line friction and channel partners scaling back commitments, Bank of America warns that sentiment has further room to deteriorate.
Investors hoping for a quick cyclical bounce may find that NKE stock has yet to establish a firm valuation floor. Note that the footwear giant is currently trading firmly below all of its key moving averages (MAs) as well, indicating bears remain in control across multiple timeframes.