Nike (NKE) stock has received another downgrade following its most recent financial results, which have been characterized on Wall Street as a disaster for the company.
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NKE stock was downgraded to Hold from Buy previously at Piper Sandler (PIPR). Analysts at Piper Sandler lowered their price target on the shares to $50 from $60, and said that the company needs to focus more on innovation to fill the void created by selling fewer of its classic shoes such as Air Force 1.
In a note to clients, Piper Sandler said that they also remain worried about Nike’s ongoing turnaround plan and saturation in athleisure as a growing number of smaller and more nimble competitors enter the space and challenge the company’s dominance.
Nike’s Earnings and Turnaround
NKE stock plunged to an 11-year low after its most recent financial results and is now trading below $45 a share. The sharp decline came after management said that earnings this year are expected to be flat, and that more work is needed on the company’s ongoing turnaround strategy.
China, in particular, remains a problem for the athletic apparel and sneaker maker. Revenue in China fell 11% in the most recent quarter, dragged lower by a 27% drop in equipment sales, along with footwear and apparel declines. China remains Nike’s second-biggest market after the U.S.
Is NKE Stock a Buy?
Nike’s stock has a consensus Moderate Buy rating among 24 Wall Street analysts. That rating is based on 15 Buy and nine Hold recommendations issued in the last three months. The average NKE price target of $62.58 implies 45% upside from current levels.
