According to a report from Investing.com, RBC Capital Markets downgraded Nike to ‘Sector Perform’ from ‘Outperform’ and slashed its price target to $50.
- RBC Capital analyst Piral Dadhania said that while Nike's recovery under CEO Elliott Hill is gaining traction, the firm believes the progress is slower and narrower than anticipated.
- The analyst also highlighted growing competition in the premium activewear market from brands such as Lululemon, Alo Yoga, and Vuori.
- The firm also highlighted concerns about a widening disconnect between wholesale shipments and direct-to-consumer sales, particularly in North America.
Nike Inc. (NKE) shares fell more than 1% in the premarket session on Wednesday amid a reported downgrade and price target cut from RBC Capital Markets.
According to a report from Investing.com, the analyst downgraded Nike to ‘Sector Perform’ from ‘Outperform’ and slashed its price target by more than 28% to $50 from $70 due to a slower-than-expected turnaround and fewer positive catalysts.
The revision comes shortly after the athletics apparel retailer launched its "Rip the Script" global campaign strategy for the FIFA World Cup 2026, which begins on June 11.
RBC’s Rationale For NKE Stock Downgrade
While Nike's recovery under CEO Elliott Hill is gaining traction, RBC Capital analyst Piral Dadhania said that the firm believes the progress is slower and narrower than anticipated. Dadhania also said that the firm believes the World Cup, ongoing inventory reductions, and a lack of fresh growth initiatives will not be enough to drive a lasting revenue rebound over the remainder of calendar 2026.
Nike shares have declined about 50% since Hill’s appointment, while its rival Adidas gained around 70% over a comparable period following its own CEO transition, the analyst said. Additionally, the firm said that it sees Nike’s three-year revenue growth outlook at around 3%, below the sector’s unweighted average of 6%, and significantly below Adidas at 8%.
The firm also cut its fiscal 2027 and fiscal 2028 earnings per share estimates by 9% and 13%, respectively.
The analyst also highlighted growing competition in the premium activewear market, noting that brands such as Lululemon, Alo Yoga, and Vuori have established stronger positions in women's apparel.
The firm highlighted concerns about a widening disconnect between wholesale shipments and direct-to-consumer sales, particularly in North America. While RBC expects Nike's full-price DTC business to improve as comparisons become easier in FY27, it said that it remains cautious on the pace of the recovery, as per the report.
The firm warned that if Nike were valued in line with the broader sector, its fair value could fall to roughly $34–$38 per share. "We are cautious on credibility of any financial targets," Dadhania reportedly wrote.
What Do Other Wall Street Analysts Think?
Last week, Goldman Sachs and UBS acknowledged early signs of progress in Nike's turnaround efforts.
On Friday, Goldman Sachs maintained a ‘Neutral’ stance on the company with a price target of $52 after attending the company’s Global Football showcase. Meanwhile, UBS reiterated a ‘Neutral’ rating with a $54 price target, noting that Nike’s broader turnaround will likely take longer than expected.
The company’s shares have a 12-month average price target of $60.49, as per data from Koyfin. This indicates an upside potential of more than 35% from its previous closing price.
NKE Stock: Retail Stance
On Stocktwits, retail sentiment stayed at the ‘bearish’ level over 24 hours amid ‘normal’ message volumes.
However, some retail investors dismissed RBC’s downgrade. One user called it “pure manipulation.”
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Another user questioned the downgrade even as “the turnaround is in full swing and the World Cup is kicking off.” The user added, “I hope no one falls for this game anymore.”
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NKE stock has declined more than 29% so far this year.
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