Nike shares are set to open at roughly $32 on Friday, their lowest level since 2013, after the company's fiscal first-quarter report showed revenue missing estimates and a forecast for sliding sales in fiscal 2027. Wall Street analysts, including Wells Fargo's Ike Boruchow, say the stock's decline isn't finished yet.
Nike shares fell 9% in premarket trading after the company's latest earnings report, putting the stock on track to open Friday at its lowest price since 2013. The shares are now down about 45% year to date.
Earnings beat, revenue misses
Nike posted earnings of 48 cents per share for the fiscal first quarter, topping the 43 cents analysts polled by LSEG had expected. However, revenue came in at $11.21 billion, slightly below the Street's consensus estimate of $11.32 billion.
The company said it expects revenue to slide by a high single-digit percentage in fiscal 2027, and it guided adjusted earnings per share for the current fiscal year to come in between $1.15 and $1.35. Nike also said it would lay off more staff as part of a restructuring plan intended to position the company for long-term growth. The decline partly reflects a lack of innovation in its footwear business and macroeconomic headwinds, alongside sluggish sales in its China market.
Analysts see more downside
According to Wells Fargo analyst Ike Boruchow, who wrote in a note to clients: "It's simply hard to find good news here". Wells Fargo has an equal weight rating and a $30 price target on the stock, implying nearly 15% downside from Thursday's close.
Other banks weigh in with a range of views. Goldman Sachs holds a neutral rating with a $30 target, while Morgan Stanley rates the stock underweight at $27 and Bank of America rates it underperform at $24. Citi is neutral with a $32 target, and Bernstein is the outlier with an outperform rating and a $45 target. Several analysts said they are waiting for Nike's investor day in November for more clarity on the business.
Source: CNBC
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