Goldman Sachs downgrades Nike to Sell on market share decline

Goldman Sachs has downgraded Nike’s stock rating from Neutral to Sell, slashing its price target from $49.00 to $27.50. The stock, currently trading at $33.96, has dropped over 50% in the past year and is near its 52-week low of $31.97. Analysts expect an 8% revenue decline in fiscal 2027, with 12 revising their earnings downward.

The firm suggests Nike has accepted a smaller role in the sportswear market, noting that the performance business is still functional, but the larger sportswear category continues to struggle. Goldman Sachs interprets Nike’s strategy of focusing on smaller areas as an admission that the market structure has permanently shifted against the company. Lower barriers to entry mean Nike must compete with numerous challengers or risk losing more market share, especially in China, where sales are expected to contract further this year.

With revenues under pressure through fiscal 2028 and limited help from the Pace restructuring plan until fiscal 2029, Goldman Sachs sees little reason to hold onto the stock. Despite these challenges, InvestingPro analysis suggests Nike remains undervalued at current levels compared to its Fair Value.

In other recent news, Nike reported first-quarter fiscal 2027 results that missed revenue expectations, marking the first revenue miss in seven quarters. The company cited declines in Greater China and continued pressure in the EMEA region. However, Nike posted a slight beat on gross margin and earnings per share, driven by high single-digit growth in performance products. The company also provided guidance for fiscal 2027, projecting a high single-digit revenue decline and adjusted earnings per share between $1.15 and $1.35.

Analysts have offered mixed ratings on Nike’s current position. Freedom Broker upgraded the stock to Buy, citing the company’s restructuring plan, while BNP Paribas Exane maintained an Underperform rating due to weak guidance. Piper Sandler cut its price target but kept a Neutral rating, and KeyBanc acknowledged Nike’s multi-year operational transformation strategy.