Bank of America Cuts Nike’s 2028 Earnings Estimate by 12%, Lowers Price Target
Key Facts
On September 25, Bank of America cut its fiscal 2028 earnings-per-share estimate for Nike by 12% and lowered its fiscal 2027 estimate by 11%, Reuters reported via Investing.com. The bank said negative sales growth would continue through 2027, rather than the spring recovery it had previously expected. On the same date, it downgraded the stock to “underperform” from “neutral” and cut its price target to $30 from $47. The moves reflect the bank’s pessimism about the company’s near-term recovery. A specific new 2028 earnings estimate or a recovery timeline for the third quarter of fiscal 2028 could not be verified in a credible open source.
The bank’s revision followed Nike’s October 1 report of results for the first quarter of fiscal 2027. The company said revenue fell 4% to $11.213 billion in the three months ended August 31, compared with $11.720 billion in the same period a year earlier. Nike shares fell 8.5% in extended trading after the results, according to Reuters via Investing.com. On the earnings call, Nike said fiscal 2027 revenue would decline by a high-single-digit percentage. It also forecast adjusted earnings per share of between $1.15 and $1.35 for the fiscal year, excluding about $0.15 per share from the impact of the Pace program. These forecasts put pressure on sales and expected weakness in earnings at the center of the debate over how quickly the company’s performance will improve.
Greater China stood out among the areas of weakness. Nike said revenue there fell 26% year over year on a currency-neutral basis in the first quarter of fiscal 2027. Company executives said NIKE Sportswear and Jordan Brand together were a high-single-digit drag on Nike’s consolidated results for the quarter. At the same time, the company said it was reducing supply in parts of the market, including Jordan, to support market health and drive full-price sales. Nike warned that supply reductions would weigh on reported revenue during the rest of fiscal 2027 and extend into fiscal 2028. That means efforts to manage inventory and distribution channels may coincide with continued revenue declines before their effects show up in results.
Nike posted a gross margin of 42.8% in the first quarter of fiscal 2027, up 60 basis points from the same period a year earlier. Management attributed the improvement to supply-chain cost controls and foreign-exchange gains, while increased discounting and a shift in channel mix weighed on it. The company said cleaning up its digital channels in China would take “multiple seasons,” with revenue and profitability there under near-term pressure. Chief Executive Elliott Hill also said the company would update its goals during the fiscal year starting in November, alongside implementation of its restructuring plan. Nike expects the plan to generate about $2.5 billion in savings through fiscal 2031, with most of them coming in fiscal 2029 and 2030.
Nike shares closed at $39.88 on November 9, according to EL7 data. The company is scheduled to hold its investor day on November 17, 2026, at 8:30 a.m. Pacific time, according to its investor relations website. The event follows Hill’s comment that Nike would update its goals during the fiscal year starting in November. The investor day may offer a newer view of the company’s priorities and financial plans as it faces the bank’s forecast that negative sales growth will continue through 2027. Future recovery figures in this report remain forecasts attributed to their sources, not results announced by the company.