HSBC lowered its rating on Nike Inc. to “Hold” from “Buy” while slashing its price target to $48 from $90 on its ” deferred turnaround,” becoming the latest investment firm to downgrade the stock following a recent disappointing forecast.
On April 1, shares of Nike fell $8.19, or 15.5 percent, to $44.63 – sinking to an 11-year low in intraday trading – after Nike’s management warned on a quarterly call that company revenues are likely to decline 2 percent to 4 percent in the current quarter. Analysts had forecast a 1.9 percent increase. Nike also forecast flat earnings and continued low-single-digit sales declines for the rest of calendar 2026, notably below analyst expectations.
In a note Monday, HSBC analyst Akshay Gupta said that despite leadership and product innovation efforts arriving since Elliot Hill was appointed Nike’s CEO in late 2024, Nike’s turnaround is stalling, causing investors to lose faith.
He said weakness in Nike’s Converse brand, China and EMEA, and sportswear continues to weigh on the company’s recovery. He sees little signs that product innovation or market shifts will spark a top-line recovery before early 2027. Gupta wrote, “Nike’s turnaround thesis has gone from ‘not if, but when’ to a ‘show me’ story with no short-term catalysts.”
The analyst also said the broader outlook for the sporting goods industry remains “challenging” with “volatile demand patterns in key markets,” continued tariff pressures, and heightened footwear competition.
He wrote, “While China suffers from a macro standpoint and also due to intense local competition, the overall level of promotions remains elevated in all markets, notably in the West as Nike deals with its inventory pile. On the cost side, US tariffs weigh on margins as companies are unable to pass on cost increases to consumers but continue to pay tariffs despite a lack of clarity around their status. Moreover, the market is becoming increasingly competitive, notably on the footwear side, with brands trying to adapt to changing consumer preferences.”
He added that inflation pressures from the Middle East conflict “looks manageable (for now)” but could be add pressure on margins if the war persists. Gupta also now expects Nike to benefit less from foreign exchange than previously estimated.
Given the dimmed broader outlook for sporting goods, the analyst also trimmed his price targets on On Holding, from $65 to $47; Amer Sports, from $50 to $48; and Adidas, from $180 to $175. He still maintained his “Buy” rating on On, Adidas and Amer Sports, believing all three should benefit from Nike’s struggles.
He wrote, “For Amer Sports, strong brand momentum at Arc’teryx and Salomon, coupled with their ongoing global rollout should support high growth. For On, we do not share investors’ concerns about recent leadership changes as we think they are unlikely to lead to business disruption or a shift in strategic direction, given the cofounders have been very much involved in the business decisions and worked closely with the outgoing CEO.”
Adidas, according to Gupta, “remains a key beneficiary of Nike’s delayed turnaround and should continue to benefit from product innovation.”
Gupta kept his “Hold” rating on Puma given minimal short-term catalysts, but raised his price target to $26 from $21 due in part to Anta Sports taking a 29 percent stake in the brand. He wrote, “We are encouraged by the recent ownership change, which we see as a long-term positive.”
Other investment firms lowering their rating on Nike since the company reported fiscal third quarter results and updated its guidance include Bank of America, to “Neutral” from “Buy;” J.P. Morgan, to “Neutral” from “Overweight;” Goldman Sachs, to “Neutral” from “Buy;” and Piper Sandler, to “Neutral” from “Overweight.” Numerous firms have also downwardly adjusted their stock price targets.
Nike’s shares closed Monday at $42.91, up 29 cents. Shares are down 18.8 percent since the updated guidance and down about a third since the start of the year.
