On the brink of the FIFA World Cup 2026, Nike Inc. (NYSE:NKE) faced a stock downgrade from RBC Capital Markets. The firm lowered its share price target from $70 to $50, citing slower-than-expected revenue growth.
The analysts, led by Piral Dadhania, have revised their outlook for the athletic-apparel giant, according to a MarketWatch report on Wednesday. Despite some progress under CEO Elliot Hill, the company’s turnaround has been slower than anticipated.
The analyst said the company’s biggest challenge is generating stronger consumer demand for its products. While a previous $70 price target assumed faster revenue growth in 2026, driven by World Cup-related sales, the analyst now expects the benefits of Hill’s turnaround strategy to materialize only in 2027.
RBC cut its Nike profitability forecasts by 9% for 2027 and 13% for 2028, leaving estimates 2% below Wall Street expectations. The firm also warned that Nike could lose market share, citing projected revenue growth of just 3%, well below the industry’s 6% average.
According to the analysts, while Nike remains the leader in lifestyle footwear, it trails Hoka, a brand of Deckers Outdoor (NYSE:DECK), and privately held New Balance in running shoes. In premium women’s apparel, Vuori, Alo Yoga, and Lululemon (NASDAQ:LULU) hold stronger positions.
Nike’s Comeback Still Elusive?
Nike’s recent struggles can be traced back to its decision in early 2026 to lay off 775 employees at its U.S. distribution centers as part of an automation push. This move followed the disclosure of 1,000 corporate job cuts in the previous summer.
In April, Nike was reportedly in exclusive talks to replace Adidas AG (OTC:ADDYY) as the official match ball supplier for UEFA men’s club competitions from 2027 to 2031, ending Adidas’ 25-year tenure. CEO Elliott Hill has identified football and the upcoming FIFA World Cup as key growth opportunities, though Zacks analyst David Bartosiak cautioned that sponsorship deals alone are unlikely to drive a turnaround without meaningful product innovation.
Meanwhile, Nike reported a third-quarter revenue of $11.28 billion, beating analyst estimates of $11.24 billion. However, the flat total revenue growth year-over-year and a 4% decline in Nike Direct revenues indicate that the company’s turnaround efforts are yet to yield the desired results.
Benzinga’s Edge Rankings place Nike in the 28th percentile for quality and the 65th percentile for value, reflecting its mixed performance. Benzinga's screener allows you to compare Nike's performance with its peers.
NKE Price Action: On a year-to-date basis, Nike declined 30.53%, as per Benzinga Pro. On Wednesday, it fell 1.55% to close at $43.96.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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