BUZZ-Bank of America turns bearish, says "risks are rising," Nike shares fall

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September 25 - ** In early Friday trading, Nike (NKE.N) shares fell 1.3% to $35.54, reaching a more than 12-year low. This came after BofA Global Research downgraded the athletic apparel giant from “Neutral” to “Underperform.”

** The brokerage lowered its price target from $47 to $30, implying a further downside of nearly 17% from the stock’s previous closing price.

** BofA analyst Lorraine Hutchinson stated in a research note that, due to the delayed recovery in Nike (NKE)’s operations, she sees downside risks to both earnings per share (EPS) forecasts and valuation.

** Hutchinson noted that, under ongoing category and macroeconomic pressures, the company’s innovation remains overshadowed by its struggling classic product lines.

** She now expects sales to show negative growth through fiscal year 2027, whereas she previously expected a turning point in the spring.

** She wrote that the price target cut to $30 is based on a 16x P/E multiple (previously 22x), now in line with the industry average.

** In June, NKE had signaled (link) that its recovery process would be prolonged, due to persistent weakness in China and a cautious outlook, overshadowing slightly better-than-expected Q4 revenue performance.

** According to LSEG data, out of 44 brokerages, 13 recommend a “Strong Buy” or “Buy,” 25 “Hold,” and 6 “Sell”; the median target price is $44.80.

** NKE’s share price is down about 44% year to date, underperforming the S&P 500 Consumer Discretionary Sector .SPLRCD which is down about 5%, and the S&P 500 Index .SPX which is up 13%.

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