Nike, Lululemon Stocks Slide Amid Analyst Caution Over Weaker Demand
Nike (NKE) and Lululemon Athletica (LULU) stocks are headed for weekly losses, weighed down by fresh analyst caution. Analysts at Truist have downgraded Nike to 'Hold' from 'Buy', cutting its price target to $42 from $47. The move is in response to weaker footwear trends at DICK'S Sporting Goods and a softer retail environment.
Truist's Joseph Civello points out that the retailer's recent Q2 results showed weak sales and earnings, with comparable sales at Foot Locker declining 3.6%. Nike has lost more than 60% of its market value since November 2021 and has delivered its weakest relative performance against the S&P 500 in roughly 25 years.
Goldman Sachs also lowered Lululemon's price target to $111 from $122, while maintaining a 'Neutral' rating. The firm sees continued challenges for the athletic apparel company, with weaker card spending, consumer sentiment, and store traffic.