Morgan Stanley Sounds Alarm on Nike's Earnings Outlook

Nike's stock has been under pressure due to Morgan Stanley's bearish analyst call and concerns over its earnings outlook.

The investment firm resumed coverage on Nike with an 'Underweight' rating, citing elevated valuation, weak China sales, and a slower-than-expected turnaround in the company's fortunes.

Nike's China revenue declined by 17% in the fourth quarter of fiscal 2026, marking eight consecutive quarters of decline. The company plans to limit online sales by wholesale partners and emphasize Nike-controlled digital channels starting January 2027, which analysts estimate could result in a $500 million to $1 billion sales impact.

Other Wall Street firms have also expressed caution on Nike's prospects, with JPMorgan downgrading the stock to 'Underweight' and BMO Capital initiating coverage with an 'Underperform' rating. However, Bernstein maintains an 'Outperform' rating with a price target of $68.