TLDR
- Nike shares declined over 1% in premarket hours Tuesday, heading toward their lowest close in 13 years.
- Berenberg slashed its rating to Sell from Hold while reducing the price target from $49 to $27.50.
- The athletic apparel giant has lost 47% of its value in 2026 and trades 81% beneath its November 2021 peak.
- Analyst sentiment has soured dramatically, with just 26% of Wall Street recommending the stockāa two-decade low.
- Berenberg projects fiscal 2027 earnings per share of only $1.08, citing unresolved margin challenges and delayed restructuring benefits.
Nike stock slipped more than 1% during Tuesday’s premarket session. The decline positioned the shares to hit their weakest closing price in over a decade.
The selloff intensified after Berenberg issued a downgrade. The firm lowered its stance to Sell from Hold while cutting the target price from $49 down to $27.50.
In a research note released Tuesday, Berenberg analyst Nick Anderson argued that Nike has effectively conceded market share in the sportswear industry. Anderson characterized this structural transformation as “irreversible.”
The rating cut arrived mere days after Nike reported its fiscal first-quarter results last Thursday. Company executives provided fiscal 2027 guidance that underwhelmed Wall Street, forecasting revenue will contract by a high-single-digit percentage through May 2027.
By nearly every metric, Nike stock has endured a punishing year. The shares have plummeted 47% year-to-date in 2026.
Looking at the longer trajectory reveals an even grimmer picture. The stock now trades 81% below the all-time closing high it reached in November 2021.
Performance Categories Shine While Sportswear Suffers
Berenberg’s analysis highlighted certain positive developments within the quarterly report. Categories including running, football, North American basketball, tennis, and golf all delivered double-digit revenue expansion during the period.
However, the sportswear segmentāwhich represents nearly half of total company revenueāexperienced a low-double-digit percentage decline. The Jordan brand posted a mid-teens percentage drop, further weighing down aggregate performance.
This softness in sportswear is the primary driver behind Nike’s projection for high-single-digit sales declines in fiscal 2027, Berenberg noted. The China market presents the most severe headwinds.
Even though China has been positioned as critical to Nike’s “Win Now” recovery strategy launched in December 2024, sales in that region are forecast to continue shrinking for at least one more quarter. Berenberg emphasized that restoring brand strength in China will require years of effort, not just a few quarters.
Forecast Reductions Across All Metrics
Berenberg trimmed its revenue projections for Nike by 6.5%, 11%, and 13% for fiscal years 2027, 2028, and 2029 respectively. Earnings per share forecasts suffered even steeper cutsādown 38%, 46%, and 34% across the same timeframe.
The firm currently anticipates fiscal 2027 EPS will come in at merely $1.08. Berenberg also pointed out that Nike management avoided providing gross margin guidance for fiscal 2027, interpreting this omission as a red flag.
Nike’s restructuring initiative, dubbed Pace, won’t deliver meaningful benefits until fiscal 2029, according to the analysis. While the program aims to generate $2.5 billion in savings through fiscal 2031, the bulk of those gains won’t materialize until 2029 and 2030.
In contrast, $1 billion in pre-tax restructuring charges are weighted toward the near term, creating additional headwinds. Berenberg described this timing mismatch as a challenging environment for investors seeking rapid improvement.
The firm’s revised $27.50 price target was derived by applying Adidas’s 20-year historical price-to-earnings ratio to Nike’s fiscal 2029 earnings estimate. Berenberg contends that Nike’s valuation premium relative to competitors is no longer justified.
Analyst confidence in Nike has deteriorated sharply. Only 26% of analysts who cover the company currently assign it a Buy rating.
According to FactSet data, this represents the smallest percentage of Buy ratings in at least two decades. Nike did not immediately provide a response when asked to comment on the downgrade.
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