Bank of America Reaffirms "Neutral" Rating for NIKE (NYSE:NKE)

Key Points

• Bank of America reaffirmed a "neutral" rating on NIKE and slashed its price target to $55 (from $73), implying only about a 4% upside from the prior close.
• NIKE beat fiscal Q3 estimates (EPS $0.35 vs. $0.32; revenue ~$11.28B) but issued weak forward guidance — forecasting ~2–4% revenue decline and about a 20% drop in China sales — which raised margin concerns and triggered a sharp share sell-off.
• Despite near-term worries, analyst coverage is still skewed positive overall (21 Buys, 11 Holds, 1 Sell) with an average target of $72.10, while the stock trades near the low $50s with a market cap around $78.2B.

NIKE (NYSE:NKE - Get Free Report)'s stock had its "neutral" rating reissued by equities research analysts at Bank of America in a note issued to investors on Wednesday,Benzinga reports. They presently have a $55.00 price target on the footwear maker's stock, down from their prior price target of $73.00. Bank of America's price objective would indicate a potential upside of 4.11% from the company's previous close.

A number of other equities analysts have also recently issued reports on NKE. Weiss Ratings raised shares of NIKE from a "sell (d+)" rating to a "hold (c-)" rating in a report on Monday, January 12th. Williams Trading cut their price target on NIKE from $100.00 to $80.00 and set a "buy" rating on the stock in a report on Friday, December 19th. Oppenheimer restated an "outperform" rating on shares of NIKE in a research report on Wednesday, December 17th. Robert W. Baird lowered their price objective on NIKE from $93.00 to $85.00 and set an "outperform" rating for the company in a research note on Friday, December 19th. Finally, UBS Group dropped their target price on NIKE from $62.00 to $58.00 and set a "neutral" rating on the stock in a research report on Thursday, March 19th. Twenty-one investment analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $72.10.

NIKE Stock Up 3.1%

NKE stock opened at $52.83 on Wednesday. The firm has a market cap of $78.21 billion, a price-to-earnings ratio of 31.08, a PEG ratio of 2.69 and a beta of 1.27. NIKE has a 1-year low of $50.95 and a 1-year high of $80.17. The firm has a fifty day moving average price of $59.68 and a two-hundred day moving average price of $63.66. The company has a debt-to-equity ratio of 0.50, a current ratio of 2.06 and a quick ratio of 1.40.

NIKE (NYSE:NKE - Get Free Report) last posted its quarterly earnings results on Tuesday, March 31st. The footwear maker reported $0.35 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.32 by $0.03. NIKE had a net margin of 5.43% and a return on equity of 18.43%. The company had revenue of $11.28 billion for the quarter, compared to the consensus estimate of $11.23 billion. During the same period last year, the firm posted $0.54 EPS. The company's revenue for the quarter was up .1% on a year-over-year basis. Research analysts predict that NIKE will post 2.05 EPS for the current year.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the business. Brighton Jones LLC raised its stake in shares of NIKE by 388.5% during the fourth quarter. Brighton Jones LLC now owns 202,411 shares of the footwear maker's stock valued at $15,316,000 after purchasing an additional 160,980 shares in the last quarter. Caxton Associates LLP acquired a new stake in NIKE in the first quarter worth about $311,000. United Bank grew its position in NIKE by 11.3% in the 2nd quarter. United Bank now owns 17,067 shares of the footwear maker's stock valued at $1,212,000 after buying an additional 1,736 shares in the last quarter. Edgestream Partners L.P. increased its stake in NIKE by 83.6% during the 2nd quarter. Edgestream Partners L.P. now owns 50,759 shares of the footwear maker's stock valued at $3,606,000 after buying an additional 23,110 shares during the period. Finally, Arrowstreet Capital Limited Partnership increased its stake in NIKE by 410.3% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 132,942 shares of the footwear maker's stock valued at $9,444,000 after buying an additional 106,891 shares during the period. Institutional investors and hedge funds own 64.25% of the company's stock.

More NIKE News

Here are the key news stories impacting NIKE this week:

• Positive Sentiment: Q3 results beat consensus on both top and bottom lines (EPS $0.35 vs. ~ $0.31 and revenue ~$11.28B in line/above estimates), showing some operational progress and product demand in running/performance categories. TipRanks Q3 Preview
• Positive Sentiment: Management reiterated parts of the “Win Now” turnaround — tighter discounting and new product innovation were credited with stabilizing demand in some segments. Reuters: Sales Beat
• Neutral Sentiment: Revenue was essentially flat year‑over‑year (reported ~$11.3B) with mixed regional performance: wholesale held up while NIKE Direct declined — important context but not an immediate positive/negative catalyst by itself. Business Wire Release
• Neutral Sentiment: Some analysts still highlight long-term upside tied to brand strength and product cycles; coverage remains skewed bullish overall despite short-term concerns. WSJ: Analyst Context
• Negative Sentiment: Forward guidance disappointed: Nike warned current-quarter revenue could decline ~2–4% and projected China sales to drop about 20%, a major hit given China’s size for the business — this is the primary driver of the stock’s decline. Invezz: Weak Outlook
• Negative Sentiment: Gross‑margin pressure and narrower operating profit were highlighted (management expects margin recovery over multiple quarters), raising near‑term profitability concerns. Seeking Alpha: Margin Pressure
• Negative Sentiment: Geopolitical risk: executives warned that unrest in the Middle East could further complicate the turnaround, adding a macro tail‑risk that may keep investors cautious. Reuters: Middle East Risk
• Negative Sentiment: Immediate market reaction: shares slid sharply in after‑hours / premarket trading, reflecting investor skepticism that the turnaround will accelerate given the new guidance and China slump. Blockonomi: Stock Plunge
• Neutral Sentiment: Some houses (e.g., Citi) maintained neutral/hold ratings citing the beat but cautious outlook; watch for upcoming analyst revisions and updated models. TipRanks: Citi Hold

About NIKE

Nike, Inc NYSE: NKE is a global designer, marketer and distributor of athletic footwear, apparel, equipment and accessories. Founded in 1964 as Blue Ribbon Sports by Phil Knight and Bill Bowerman and renamed Nike in 1971, the company is headquartered near Beaverton, Oregon. Nike develops and commercializes products across performance and lifestyle categories for sports including running, basketball, soccer and training, and is known for signature technologies and design-driven product lines.

The company markets products under several primary brands, including Nike, Jordan and Converse, and sells through a combination of wholesale relationships, branded retail stores and direct-to-consumer channels such as company-operated stores and digital platforms (e.g., Nike.com and mobile apps).

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