Morgan Stanley Slashes Nike Price Target to $31 Amid China Concerns
Nike (NKE) stock has hit a 12-year low after Morgan Stanley reinstated coverage with an Underweight rating and a $31 price target. The firm's bearish call is based on earnings expectations, specifically lower revenue growth in China.
Morgan Stanley models second-half fiscal 2027 earnings coming in mid-single digits below current estimates, and fiscal 2028 through 2030 earnings averaging about 15% below consensus. This is due to a more cautious view on revenue, particularly in China, where the firm expects a slower recovery than most analysts are currently pricing in.
The main driver behind these lower estimates is the sportswear market's increasing fragmentation and competitiveness, making Nike stock look expensive relative to its new growth trajectory. Morgan Stanley flagged that China weakness could show up as early as the next quarterly earnings report or at Nike's November Investor Day.