Key Moments
- Nike shares fell 1.4% in premarket trading after Evercore ISI downgraded the stock to In Line from Outperform. The firm also cut its price target to $46 from $57.
- Evercore cited weaker sales channels, limited product innovation, and a growing chance that Nike will reset expectations before its Fall analyst day.
- Evercore lowered its FY27 EPS estimate to $1.65 from $1.70. It also cut its FY28 forecast to $2.20 from $2.25.
Evercore Downgrade Weighs on Nike Stock
Nike (NYSE:NKE) traded lower in premarket action on Tuesday. Shares slipped 1.4% after Evercore ISI downgraded the stock to In Line from Outperform. In addition, the firm lowered its price target to $46 from $57.
Evercore said weaker business trends drove the decision. Specifically, analysts pointed to softer channel checks, limited product innovation, and a greater risk of lower earnings expectations ahead of Nike’s Fall analyst day.
Concerns Around Turnaround Progress and Demand Trends
The downgrade comes about two years into Nike’s turnaround effort. Meanwhile, Evercore’s fieldwork continues to reveal signs of weakness across several areas of the business.
The firm highlighted three main concerns:
- Growing weakness in U.S. lifestyle and family channels, with more order cancellations and delays than Nike expected.
- Weak performance from Jordan retro launches.
- European supply chain disruptions that could delay World Cup-related products.
Analysts led by Michael Binetti see a rising chance that Nike will lower expectations again in the near term. According to the team, this step could help the company avoid a larger reset at its Fall 2026 analyst day. However, they warned that another guidance cut could distract investors from Nike’s long-term strategy.
EPS Estimates and Guidance Sensitivity
Evercore also reduced its earnings forecasts. The firm now expects FY27 EPS of $1.65, down from $1.70 and below the Street estimate of $1.82. Likewise, it lowered its FY28 estimate to $2.20 from $2.25, compared with consensus expectations of $2.33.
Analysts believe investors will closely watch any changes to Nike’s guidance. Previously, management said first-half FY27 revenue would decline in the low single digits. Even so, Evercore sees little reason for Nike to raise its outlook at the upcoming quarterly update.
| Metric | Previous Evercore Estimate | New Evercore Estimate | Street / Consensus |
|---|---|---|---|
| FY27 EPS | $1.70 | $1.65 | $1.82 |
| FY28 EPS | $2.25 | $2.20 | $2.33 |
| Price Target | $57 | $46 | – |
Offsetting Positives and Valuation Context
Evercore did highlight several positive factors. For example, performance categories such as Nike Run remain healthy. In addition, a potential $1 billion tariff refund could create room for more brand investment. The firm also said fourth-quarter consensus expectations appear achievable.
From a valuation perspective, Nike’s EV/Sales ratio of 1.5x sits near a 15-year low. Therefore, analysts believe this could help limit further downside pressure.
However, uncertainty remains. Analysts said they need more clarity on the steps Nike must take to stabilize the brand. Those efforts could include supporting retail partners at the expense of Nike’s own margins. As a result, they no longer justify assigning Nike the premium valuation it once commanded.
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