NIKE (NYSE:NKE), a global athletic footwear and apparel brand, closed at $35.75, down 0.67%. Bank of America downgraded NIKE and cut its price target on the stock from $47 to $30. Investors are waiting for the Oct. 1 earnings report and for any potential guidance. Trading volume reached 34.2M shares, coming in nearly 23% above its three-month average of 27.8M shares.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) rose 0.49% to 7,742, and the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 0.48% to 27,069. Among athletic footwear, apparel, equipment, and accessories peers, lululemon athletica (NASDAQ:LULU) closed at $101.30, down 0.33%, while Under Armour (NYSE:UAA) closed at $4.42, down 1.67%, showing mixed pressure across the category.
What this means for investors
An analyst with Bank of America lowered their price target on Nike stock from $47 to $30 on Friday, but the apparel juggernaut’s shares largely remained flat. Over the last five years, however, NKE stock has lost three-quarters of its value.
The analyst lowered their EPS estimates for Nike to $1.43 in 2027 and $1.87 in 2028, as they see the company’s slow-but-steady turnaround taking even longer than already expected.
One alarming aspect of this EPS guidance is that, if it comes to fruition, Nike’s $1.64-per-share dividend could be at risk, as it would be paying out more to shareholders than it would generate in net income.
While Nike has made multiple mistakes over the last five years or so, I cannot help but think the brand still has some salvageable value at some point. That said, I’m not interested in rushing in to buy the stock until there is some stabilization or a sales turnaround.
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