Bank of America analyst Lorraine Hutchinson recommends caution in playing Nike (NKE) shares, citing sufficient evidence that the footwear giant has not bottomed yet. Her bearish call on the world’s largest supplier of athletic shoes is significant, given NKE stock is already trading about 45% below its year-to-date high.
From a technical perspective, Nike sits decisively below its key moving averages (MAs), signaling bears remain firmly in control across multiple timeframes.
What’s Behind BofA’s Downgrade of Nike Stock
In a research note this morning, Hutchinson downgraded NKE shares to “Neutral” and trimmed her price target to $30, indicating potential downside of another 15% from here.
Wholesale channels in North America present an immediate headwind, where growth appears to be outstripping retail sell-through, she told clients.
According to her, softening demand for legacy classics and muted adoption of newer product lines leaves Nike’s forward order books “at risk”.
In the company’s latest reported quarter, Greater China sales came in down 17%, while its planned pullbacks from external e-Commerce distributors threaten near-term top-line metrics as well, the BofA analyst added.
Delayed Turnaround to Hurt NKE Shares
The fundamental backdrop leaves Nike shares dependent on margin expansion and aggressive cost governance to protect profits, leaving minimal room for execution missteps.
Hutchinson now forecasts “negative sales growth through F27,” deferring any top-line turnaround to 2028. BofA also reduced its fiscal 2027 and 2028 earnings estimates by 11% and 12%, revising earnings per share (EPS) calls to $1.43 and $1.87, respectively.
In her report, the analyst even cautioned that NKE’s dividend sustainability is becoming severely strained, noting its fiscal 2027 estimates now imply a “107% payout ratio.”
All in all, with limited visibility into a durable operational rebound, Bank of America warns that Nike’s earnings multiple faces additional compression before a bottom takes shape.
How Wall Street Recommends Playing Nike
Investors should note, however, that other Wall Street analysts are not as dovish on NKE stock as Hutchinson.
According to Barchart, while the consensus rating on Nike sits at “Hold,” the mean price target of nearly $47 suggests potential upside of about 30% from here.
