RBC Downgrades Nike Amid Slower-Than-Expected Turnaround

Nike Inc. (NKE) shares dropped more than 1% in premarket trading on Wednesday following a downgrade from RBC Capital Markets. The firm lowered its rating to ‘Sector Perform’ from ‘Outperform’ and reduced its price target to $50 from $70, citing a slower-than-expected recovery under CEO Elliott Hill.

RBC Capital analyst Piral Dadhania noted that while Nike’s turnaround is gaining traction, progress is slower and narrower than anticipated. The analyst also pointed to increasing competition in the premium activewear market from brands like Lululemon, Alo Yoga, and Vuori, as well as concerns about a disconnect between wholesale shipments and direct-to-consumer sales in North America.

The downgrade comes shortly after Nike launched its ‘Rip the Script’ global campaign for the FIFA World Cup 2026, which begins on June 11. RBC expressed skepticism about the World Cup, ongoing inventory reductions, and a lack of fresh growth initiatives driving lasting revenue growth in 2026. The firm also cut its fiscal 2027 and fiscal 2028 earnings per share estimates by 9% and 13%, respectively.

Other Wall Street analysts, such as Goldman Sachs and UBS, have acknowledged early signs of progress but maintained ‘Neutral’ stances with price targets of $52 and $54, respectively. The 12-month average price target for Nike stands at $60.49, suggesting a potential upside of over 35% from its previous closing price.