Nike (NKE) Stock Drops After Evercore Warns of More Bad News Ahead

TLDR

• Evercore ISI downgraded Nike to In Line from Outperform, cutting its price target to $46 from $57
• Nike slipped 1.4% in premarket Tuesday, with the stock opening at $43.22
• Key concerns include U.S. channel deterioration, weak Jordan retro launches, and late World Cup product in Europe
• Evercore’s FY27 EPS estimate of $1.65 sits well below Wall Street consensus of $1.82
• Despite the downgrade, Nike beat its last earnings estimate ($0.35 vs $0.29 expected) and pays a 3.8% dividend yield

Nike (NKE) stock opened at $43.22 on Tuesday after Evercore ISI downgraded the stock to In Line from Outperform and slashed its price target to $46 from $57. The stock had already slipped 1.4% in premarket trading on the news.

NIKE, Inc., NKE

The downgrade comes roughly two years into Nike’s turnaround effort. Evercore’s field work is still turning up fresh signs of weakness, and the analysts aren’t sugarcoating it.

Evercore flagged three specific problem areas. First, deepening deterioration in U.S. lifestyle and family channels, where order cancellations and pushbacks are running above what Nike had expected. Second, struggling Jordan retro launches. Third, European supply chain disruptions that caused World Cup product to arrive late.

The broker trimmed its FY27 EPS estimate to $1.65 from $1.70 — well below the Street’s $1.82 consensus. Its FY28 estimate also came down to $2.20 from $2.25, versus consensus of $2.33.

Analysts led by Michael Binetti warned that Nike may need to reset consensus estimates lower before its critical Fall 2026 analyst day. Doing so, they said, would be “highly distracting as it tries to refocus investors on a better narrative on that day.”

The stock will be closely watched for any change to Nike’s prior guidance that first-half FY27 revenues would decline in the low single digits. Evercore sees almost no incentive for the company to raise that outlook at the upcoming quarterly update.

What’s Still Working

Not everything is broken. Evercore noted that performance categories like Nike Run remain solid. A potential $1 billion tariff refund could also give the company room to reinvest in the brand.

Fourth-quarter consensus estimates are seen as broadly safe. On the valuation side, EV/Sales at 1.5x is sitting at a 15-year low, which Evercore said “could help backstop the stock from further meaningful downside.”

Nike’s most recent quarterly report showed $0.35 EPS, beating the $0.29 estimate. Revenue came in at $11.28 billion, just above the $11.23 billion expected. The company also declared a quarterly dividend of $0.41 per share, representing a 3.8% annualized yield.

Insiders and Institutions Still Buying

Despite the pressure on the stock, insiders have been picking up. Director Robert Holmes Swan bought 11,781 shares at $42.44 in early April, and Director John W. Rogers Jr. added 4,000 shares at $43.34. Over the past 90 days, insiders acquired 64,441 shares worth over $2.7 million.

On the institutional side, SG Americas Securities increased its Nike position by 14.5% in Q1, adding 167,301 shares to bring its total to around 1.32 million shares valued at roughly $69.7 million.

Analyst sentiment across the board has softened. The stock now carries a consensus Hold rating with an average price target of $60.89. HSBC cut its target from $90 to $48, and Royal Bank of Canada downgraded from Outperform to Sector Perform with a $50 target in early June.

Nike’s 12-month low sits at $41.35, with the stock currently trading not far above that level.

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