Investing.com -- Piper Sandler cut Nike shares to neutral with a $50 price target in a note on Friday, arguing that the athletic footwear giant faces a potentially saturated athleisure market, a shrinking Classics business and insufficient product innovation to fill the revenue void.

Analyst Anna Andreeva told investors that Nike is a quarter away from lapping strong gains in its Running category and raised concerns about the broader Sportswear segment.

"We worry that Athleisure is becoming too saturated across the industry, with frequency metrics at peakish levels," Andreeva wrote.

On valuation, Piper Sandler said the stock is not cheap following its post-earnings reset, trading at 22x fiscal 2028 estimated earnings with no near-term catalyst, noting that an investor day is not expected until the second half of 2026. The firm set a bull-to-bear range of $55 to $35.

Andreeva flagged the rapid decline of Nike's Classics business as a key concern, estimating the category will represent just 10% of sales by fiscal 2027, down from a period when Sportswear accounted for roughly 40% of revenues.

"We worry what will replace that volume," she wrote.

On leadership, Piper Sandler questioned whether Nike has sufficient fresh thinking to drive innovation at scale, noting that the vast majority of appointments under new leadership have been long-tenured Nike employees.

Nike shares were down around 0.5% in premarket trading. Piper Sandler lowered its valuation multiple to 25x fiscal 2028 earnings from 28x previously, citing limited earnings visibility and continued negative sell-side estimate revisions.