Wells Fargo Downgrades Nike Stock (NKE) as “Turnaround Is Simply Taking Longer Than Hoped”

On Wednesday, Wells Fargo downgraded Nike (NKE) stock to Hold from Buy, as it believes that the athletic apparel and footwear giant’s “turnaround is simply taking longer than hoped.” In fact, the brokerage lowered its 2026 earnings per share (EPS) estimates by 20% to 25% below the Street’s forecasts and downgraded several stocks in the U.S. apparel and footwear sector, including Gap Inc. (GAP) stock from Buy to Hold, due to tariff wars and macro pressures.

NKE stock declined about 2% on Wednesday and is down more than 25% year-to-date. Investors are disappointed with the company’s weak financials and loss of market share to rivals.

Wells Fargo Downgrades Nike

Wells Fargo analyst Ike Boruchow downgraded Nike stock and lowered the price target to $55 from $75. The analyst sees the possibility of the ongoing macro pressures pushing the company’s turnaround further out. He thinks the current backdrop is not suitable for CEO Elliott Hill to take the required actions to fix the model.

In March, the sneaker giant issued a disappointing guidance, warning that it expects sales to decline by a double-digit percentage in the fiscal fourth quarter (ending in May) due to tariffs, weak consumer confidence, and a slower-than-anticipated turnaround.

Meanwhile, Wells Fargo stated that it is now including the impact of tariff headwinds and assumptions for a mild recession into its model, with both headwinds expected to impact numbers from the second half of 2025. He expects a cumulative 145% tariff on Chinese imports and weak consumer sentiment to weigh on the U.S. apparel and footwear sector.

Interestingly, Wells Fargo upgraded Levi Strauss (LEVI) stock to Buy from Hold, as it sees the apparel company as a “winner” due to its low China exposure and robust brand momentum.

Is Nike Stock a Buy, Sell, or Hold?

Wall Street is cautiously optimistic on Nike stock, with a Moderate Buy consensus rating based on 16 Buys and 15 Holds. The average NKE stock price target of $79.44 implies about 41% upside potential from current levels.

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