NIKE (NYSE:NKE) Shares Down 2.4% Following Analyst Downgrade

Key Points

• NIKE shares fell 2.4% to $38.61 after Royal Bank of Canada cut its price target from $40 to $39, keeping a “sector perform” rating.
• Analyst sentiment is mixed but cautious: MarketBeat reports an average “Reduce” rating and a $40.91 average price target, with recent target cuts and sell ratings from several firms.
• NIKE beat quarterly EPS expectations ($0.48 versus $0.43) but revenue came in below forecasts at $11.21 billion and declined 4.3% year over year.

NIKE, Inc. (NYSE:NKE - Get Free Report)'s stock price fell 2.4% during trading on Friday after Royal Bank Of Canada lowered their price target on the stock from $40.00 to $39.00. Royal Bank Of Canada currently has a sector perform rating on the stock. NIKE traded as low as $37.96 and last traded at $38.6110. Approximately 20,414,855 shares were traded during mid-day trading, a decline of 17% from the average session volume of 24,677,490 shares. The stock had previously closed at $39.56.

Several other analysts have also recently issued reports on NKE. Sanford C. Bernstein restated an "outperform" rating and set a $45.00 price objective on shares of NIKE in a research note on Friday, October 2nd. Citigroup decreased their target price on NIKE from $39.00 to $32.00 and set a "neutral" rating for the company in a research report on Friday, October 2nd. Bank of America reiterated an "underperform" rating and issued a $24.00 target price (down from $30.00) on shares of NIKE in a research report on Friday, October 2nd. Robert W. Baird lowered their price target on NIKE from $44.00 to $36.00 and set a "neutral" rating for the company in a report on Friday, October 2nd. Finally, KeyCorp reissued a "sector weight" rating on shares of NIKE in a research report on Friday, October 2nd. One investment analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating, twenty have given a Hold rating and twelve have issued a Sell rating to the company. Based on data from MarketBeat, NIKE currently has an average rating of "Reduce" and an average price target of $40.91.

Insider Activity

In other NIKE news, EVP Philip McCartney sold 2,559 shares of the firm's stock in a transaction dated Wednesday, September 9th. The shares were sold at an average price of $37.59, for a total value of $96,192.81. Following the transaction, the executive vice president owned 78,121 shares of the company's stock, valued at $2,936,568.39. This trade represents a 3.17% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Venkatesh Alagirisamy sold 3,671 shares of NIKE stock in a transaction that occurred on Wednesday, September 9th. The shares were sold at an average price of $37.59, for a total value of $137,992.89. Following the completion of the transaction, the chief operating officer owned 104,862 shares of the company's stock, valued at approximately $3,941,762.58. The trade was a 3.38% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.10% of the stock is owned by corporate insiders.

Trending Headlines about NIKE

Here are the key news stories impacting NIKE this week:

• Positive Sentiment: Recent gains in performance categories and North America have helped drive a 13.9% rally over the past month. Nike’s planned $2.5 billion in “Pace” savings could also support longer-term profitability, though the benefits may take time to emerge. Read More.
• Neutral Sentiment: Royal Bank of Canada trimmed its price target to $39 from $40 and maintained a “sector perform” rating, implying limited upside from the recently quoted share price. Read More.
• Negative Sentiment: Truist downgraded Nike from “hold” to “sell” and set a $29 target, citing portfolio risks and valuation. UBS also warned that recovery may lag expectations, maintaining a “neutral” rating with a $34 target. Read More. Read More.
• Negative Sentiment: Turnaround progress is clouded by weak sales and earnings expectations, a steep decline in China sales, and shrinking Jordan and Dunk demand. Analysts have also raised concerns that Nike’s valuation remains high relative to its near-term growth outlook. Read More. Read More.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Marble Harbor Investment Counsel LLC lifted its stake in NIKE by 37.8% in the third quarter. Marble Harbor Investment Counsel LLC now owns 87,469 shares of the footwear maker's stock valued at $3,096,000 after acquiring an additional 23,985 shares during the last quarter. Allworth Financial LP grew its position in NIKE by 6.8% in the third quarter. Allworth Financial LP now owns 42,284 shares of the footwear maker's stock worth $1,497,000 after acquiring an additional 2,696 shares in the last quarter. Legacy Trust increased its stake in shares of NIKE by 7.0% during the 3rd quarter. Legacy Trust now owns 51,392 shares of the footwear maker's stock worth $1,987,000 after purchasing an additional 3,346 shares during the last quarter. Van Strum & Towne Inc. acquired a new position in shares of NIKE during the 3rd quarter worth $221,000. Finally, Maryland State Retirement & Pension System raised its holdings in shares of NIKE by 14.9% during the 3rd quarter. Maryland State Retirement & Pension System now owns 73,188 shares of the footwear maker's stock valued at $2,591,000 after purchasing an additional 9,490 shares in the last quarter. Institutional investors and hedge funds own 64.25% of the company's stock.

NIKE Stock Down 2.4%

The company has a current ratio of 2.07, a quick ratio of 1.39 and a debt-to-equity ratio of 0.39. The business's fifty day moving average price is $36.90 and its two-hundred day moving average price is $45.76. The firm has a market cap of $57.35 billion, a P/E ratio of 18.56, a P/E/G ratio of 4.73 and a beta of 1.01.

NIKE (NYSE:NKE - Get Free Report) last issued its quarterly earnings data on Thursday, October 1st. The footwear maker reported $0.48 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.43 by $0.05. NIKE had a net margin of 6.74% and a return on equity of 15.94%. The firm had revenue of $11.21 billion during the quarter, compared to analysts' expectations of $11.32 billion. During the same period in the prior year, the company posted $0.49 earnings per share. NIKE's revenue for the quarter was down 4.3% on a year-over-year basis. NIKE has set its FY 2027 guidance at 1.150-1.350 EPS. As a group, equities research analysts anticipate that NIKE, Inc. will post 1.22 EPS for the current year.

About NIKE

NIKE, Inc designs, develops, markets and sells athletic footwear, apparel, equipment and accessories for sports and fitness, as well as lifestyle products. Its portfolio includes the Nike and Jordan brands, and it owns Converse, which sells casual footwear, apparel and accessories.

The company sells products worldwide through wholesale partners and its own retail stores and digital platforms. Its offerings serve customers across a range of sports and activities, including running, basketball, soccer and training.

NIKE traces its roots to Blue Ribbon Sports, founded in 1964 by Phil Knight and Bill Bowerman.

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