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Nike (NKE) Downgraded to Hold as Analysts Warn of Consumer Belt-Tightening

By Don Francis, Editor
September 26, 2023 7:21 AM UTC
Nike (NKE) Downgraded to Hold as Analysts Warn of Consumer Belt-Tightening

Jefferies's Randal Konik downgraded their rating on Nike (NYSE: NKE) from Strong Buy to Hold on 2023/09/25. The analyst also lowered their price target by 28.6% from $140 to $100.

In a note previewing Nike's Q1 2024 earnings, the analyst expressed concerns about the future of the U.S. consumer market. Konik stated that U.S. consumers are likely to "tighten their belts," with apparel and footwear expected to see the deepest pullbacks. The resumption of student loan repayments was also highlighted as a potential catalyst that could further weigh on already soft sales at specialty apparel retailers.

Furthermore, Konik emphasized that Nike faces "incremental risk ahead" due to the continued pressure on the wholesale channel and macro headwinds impacting growth in China. These factors contribute to the analyst's decision to downgrade Nike's rating to Hold.

JP Morgan's Matthew Korn also provided an update on Nike on the same day, maintaining a Strong Buy rating on the stock but lowering the price target by -4.2% from $142. This update highlights the differing perspectives among analysts regarding Nike's future performance.

According to data from WallStreetZen, 72.7% of the top-rated analysts currently rate Nike as a Strong Buy or Buy. In contrast, 18.2% view it as a Hold, and 9.1% recommend or strongly recommend selling the stock. These varying opinions indicate the ongoing debate among analysts regarding Nike's outlook.

Looking ahead, analysts' consensus forecast suggests that Nike's upcoming year will deliver earnings per share (EPS) of $3.79. If their predictions are correct, this would represent a 15.9% increase in EPS on a year-over-year basis.

However, Nike's stock price has faced challenges recently. Since the company's last quarterly report on 2023/05/31, the stock price has declined by 13.7%. On a year-over-year basis, the stock is down 7.8%. During this period, Nike's performance has trailed behind the overall market, with the S&P 500 experiencing a 15.4% decline.

Randal Konik, the Jefferies analyst who downgraded Nike's rating, is ranked among WallStreetZen's top 29% of analysts. With an average return of 0.9% and a win rate of 42.6%, Konik specializes in analyzing companies in the Consumer Cyclical, Consumer Defensive, and Communication Services sectors.

Nike, Inc., founded in 1964, is a multinational corporation that specializes in selling athletic footwear, apparel, equipment, and accessories. The company operates both in the U.S. and internationally, offering products for adults and children. Nike is headquartered in Beaverton, OR.

What are WallStreet's top analysts predicting for Nike?

WallStreetZen tracks the performance of nearly 4,000 Wall Street analysts, whom we rank by average returns, frequency, and win-rate (backtested over multiple years).

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