'Risks are rising' for Nike's turnaround, Bank of America says. Sell shares now
Nike is facing challenges that are very risky as it attempts to turn around its struggling business, making its stock a sell, according to Bank of America.
TL;DR
- Bank of America downgraded Nike stock to 'underperform' from 'neutral'.
- The price target for Nike shares was lowered to $30 from $47.
- Risks are increasing due to innovation being overshadowed by the 'pressured classics business'.
- Negative sales growth is expected through fiscal year 2027.
- Nike faces challenges in China, with a tougher demand backdrop and intense competition.
- The dividend payout ratio is over 100%, leading to a reduced income rating.
- Nike shares have fallen 47% over the past year.