Morgan Stanley resumed coverage of Nike with an Underweight rating. The bank set a $31 price target, suggesting a 20% downside from current levels. Nike shares fell following the report, approaching a 52-week low.
Analysts project earnings per share will be 15% below consensus estimates. This forecast applies to fiscal years 2028 through 2030. The firm warns that the market is underestimating risks of negative earnings revisions and valuation compression.
The bearish outlook stems from conservative revenue forecasts and a slow medium-term recovery. Nike continues to struggle with increased competition and declining sales in Greater China.