Nike stock (NKE) dropped about 44% this year, and the pressure is only growing as the company gets ready to report its fiscal 2027 first-quarter earnings on October 1.
The latest blow came from Bank of America. The bank pulled its neutral call on Nike and moved the stock to a sell rating.
BofA also told investors to expect the share price to fall even further before any real recovery shows up.
For anyone holding Nike shares, or thinking about buying while the price is low, BofA believes the recovery investors are hoping for might take longer than expected.
Bank of America pulls its support for Nike stock
Bank of America analyst Lorraine Hutchinson, who has covered Nike for years and previously held a more positive view of the stock, downgraded the shares to Underperform from Neutral. She also cut her price target to $30 from $47, which means BofA thinks the stock could fall another 17% from its recent price near $35.75.
Hutchinson had defended the stock for much of 2026, arguing that the bad news was already priced in.
That view has changed.
She told clients Nike’s recovery is “taking longer to materialize as weakness in its larger lifestyle categories outweighs progress from newer product launches,” according to a note reported by CNBC.
Hutchinson summed up the shift in three words: “Risks are rising.”
Nike sells fashion and sports gear under the Nike, Jordan, and Converse brands. It makes money through its own stores and website, and through retail partners like Dick’s Sporting Goods and Foot Locker.
When both sales channels slow down at the same time, the company’s revenue and profits take a hit.
Nike’s older styles and retail partners are both struggling
BofA pointed to three problem areas. Nike’s classics business, which includes older, popular shoe styles that usually sell steadily without heavy promotion, is selling fewer items, and Nike’s newer products have not been strong enough to fill the gap.
Another issue is how Nike sells through other retailers. Nike has been shipping shoes and clothing to stores, but those products are not selling fast enough on shelves. When that happens, retailers tend to order less in the future, and that delays any recovery.
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The company’s China market is also struggling. BofA said the “China reset faces a tougher demand backdrop.” Chinese competitors Anta and Li Ning have been winning over local shoppers for eight straight quarters. That makes it harder for Nike to grow in one of its biggest markets outside the U.S.
Hutchinson also lowered her profit forecasts. She cut her fiscal 2027 earnings-per-share estimate by 11% to $1.43, and her fiscal 2028 estimate by 12% to $1.87. Her fiscal 2027 number now sits 14% below what most other analysts on Wall Street expect.
Sell ratings on Nike just hit a 30-year high
BofA is not the only one changing its mind about the stock.
JPMorgan analyst Matthew Boss, a veteran retail analyst, cut Nike to Underweight in August with a $40 target.
“Our timeline for NKE to return to a 10% operating margin now extends to FY29,” he told clients.
Boss believes it could take three more years for Nike to get its profit margins back to healthy levels.
Oppenheimer and Barclays trimmed their Nike price targets this week, and Goldman Sachs also pulled back, according to Barron’s.
BofA’s new $30 target values Nike at about 16 times its expected earnings, down from its previous 22-times figure. That lower number treats Nike more like an average retail company than a premium global brand.
There is a counterargument worth knowing. A fair-value model from Investing.com puts Nike closer to $54, based on the stock trading near historically low valuations.
Investors will have to decide which side of the argument makes more sense, and the October 1 earnings report will give them fresh numbers to work with.
What Nike investors should watch in the first-quarter report
The upcoming earnings call will reveal how much of BofA’s bearish view is already playing out.
Analysts and investors will focus on how fast products are selling in North American stores, whether sales in China are still declining, and whether Nike can protect its profit margins. Order trends from retailers also matter, because they show what demand could look like six months from now.
Dividend investors have a separate concern. BofA warned that Nike is currently paying out more in dividends than it earns, which is not something the company can keep up for long. Nike’s management may hold the payment steady, but a dividend cut is possible if profits keep falling.
Nike CEO Elliott Hill has been direct about where the business stands.
On the company’s fiscal fourth-quarter call in June, he told investors, “Overall, the results aren’t there yet,” and added that customer demand in Nike Sportswear and Jordan Streetwear “remains challenged.”
A stronger update on those two areas next week could change the mood around the stock, while another weak report could push more analysts to downgrade.
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