Nike slips after Evercore downgrades stock on gloomy near-term outlook

Investing.com -- Nike shares slipped 1.4% in premarket trading Tuesday after Evercore ISI downgraded the stock to In Line from Outperform and cut its price target to $46 from $57.

The move reflected deteriorating channel checks, minimal new product innovation and a rising risk that the company will need to reset consensus estimates lower before its critical Fall analyst day.

The downgrade came roughly two years into Nike’s turnaround effort, with Evercore’s field work continuing to turn up fresh signs of weakness.

The broker flagged three specific problem areas: deepening deterioration in U.S. lifestyle and family channels, where order cancellations and pushbacks are running above what Nike anticipated; struggling Jordan retro launches; and European supply chain disruptions causing World Cup product to arrive late.

"We see rising probability that Nike will have to signal Consensus lower again in the near-term to avoid potential for a far worse scenario where it would have to lower the full FY27 outlook at the Fall ’26 analyst day," analysts led by Michael Binetti wrote, adding that such a reset would be "highly distracting as it tries to refocus investors on a better narrative on that day."

Evercore trimmed its fiscal 2027 (FY27) EPS estimate to $1.65 from $1.70, well below the Street’s $1.82, and cut its FY28 estimate to $2.20 from $2.25, versus consensus of $2.33.

The analysts said the stock will be hyper-sensitive to any change in Nike’s prior guidance that first-half FY27 revenues would decline in the low single digits, and see almost no incentive for the company to raise its outlook at the upcoming quarterly update.

On a more positive note, Evercore noted that performance categories such as Nike Run remain solid, that a potential $1 billion tariff refund could support reinvestment in the brand, and that fourth-quarter consensus estimates look broadly safe.

Valuation-wise, the analysts said EV/Sales at 1.5x is at a 15-year low and “could help backstop the stock from further meaningful downside.”

“But until we know the steps Nike will need to take to ultimately stabilize the brand (potentially including boosting retailer’s margins at the expense of its own), we struggle to continue anchoring to a mid20’s P/E —a premium Nike earned over many years,” they added.

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