Analyst explains why you should avoid owning Nike stock despite massive pullback

UBS analyst Jay Sole has warned investors to avoid Nike stock despite its recent market pullback, citing a high probability of significant earnings cuts and share price downside when the company reports its first-quarter fiscal 2027 results. Sole lowered Nike's 12-month price target by 13% to $42 from $48, maintaining a Neutral rating, and expects the company to deliver first-quarter earnings per share of $0.39, below Wall Street consensus expectations of $0.44.

The brokerage also anticipates weak second-quarter guidance and a reset of full-year fiscal 2027 expectations lower ahead of the November investor day. The bearish sentiment is further supported by deteriorating demand trends across major product categories and key geographic markets, including North America, Greater China, Europe, and Converse.

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