"Piper Sandler's downgrade reflects mounting concern that Nike's turnaround under CEO Elliott Hill is progressing too slowly against a worsening backdrop. Greater China revenue fell 7% year-over-year in the most recent quarter and has now declined for four consecutive quarters."
"Gross margin compressed 130 basis points year-over-year to 40.2%, with tariffs in North America acting as a structural drag rather than a temporary one. Meanwhile, Nike Direct revenue slipped 4% to $4.5 billion, and the digital channel has now declined across multiple consecutive quarters."
"Competitive pressure from nimble challengers like On Holding and Hoka continues to intensify, particularly in the premium running segment where Nike once held near-unchallenged dominance. The strategic pivot back toward wholesale is helping revenue at the top line, but it's a defensive repositioning rather than a growth catalyst."
Nike's stock has faced significant challenges in 2026, leading Piper Sandler to downgrade it from Overweight to Neutral with a price target of $50. The company's shares are down 30% year-to-date, reflecting deteriorating sentiment. Concerns include a 7% decline in Greater China revenue and a 4% drop in Nike Direct revenue. Competitive pressures from brands like On Holding and Hoka are intensifying, while Nike's strategic pivot back to wholesale is seen as defensive rather than growth-oriented. Despite these challenges, Nike has maintained a long history of dividend increases.
Read at 24/7 Wall St.
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