Berenberg Slashes Nike to Sell, Sees 13-Year Low Ahead

Nike just got hit with its ugliest analyst call in years. Berenberg downgraded the sportswear giant to Sell from Hold on Tuesday, slashing its price target to $27.50 from $49 — a cut that sent shares toward their lowest close in 13 years.

Analyst Nick Anderson didn't mince words in the research note, arguing Nike has effectively conceded market share in sportswear and that the shift looks permanent. Barron's and multiple other outlets confirmed the call Tuesday, noting the stock was already on track for a fresh 13-year low even before the downgrade hit the tape.

The timing matters. Berenberg's note landed just days after Nike reported fiscal first-quarter results last Thursday that underwhelmed Wall Street across the board. Revenue fell 4% to $11.2 billion, with declines concentrated in Greater China and partially offset by North America growth. Net income dropped 2% to $712 million.

Buried in the numbers is a split story. Running, football, North American basketball, tennis and golf all posted double-digit revenue growth during the quarter, as CNBC detailed in its coverage of the print.

"Nike is turning into a cost-cutting story, announcing a $2.5bn cost savings program as management is adapting to the reality of significant pressure within Sportswear, Jordan, and China." — Citi analysts, research note

Sportswear — nearly half of total company revenue — fell by a low-double-digit percentage, and the Jordan brand dropped in the mid-teens. That's the segment weighing down everything else, and it's exactly why Nike is now guiding to a high-single-digit revenue decline for all of fiscal 2027.

Berenberg's forecast cuts are steep: revenue estimates down 6.5%, 11% and 13% for fiscal 2027 through 2029, with EPS forecasts slashed even harder — down 38%, 46% and 34% over the same stretch. The firm now pegs fiscal 2027 EPS at just $1.08, a sharp reset from where estimates sat a year ago.

Nike's new restructuring plan, dubbed "Pace," aims to cut $2.5 billion in costs by 2031 — but Berenberg flagged that the bulk of savings won't show up until 2029 and 2030, while roughly $1 billion in restructuring charges hit sooner. That's a tough mismatch for anyone hoping for a quick turnaround. CEO Elliott Hill has been candid about the pain involved, saying the layoff plans tied to Pace "will result in fewer roles across Nike" starting in 2027.

China remains the biggest overhang. Despite Nike's "Win Now" recovery strategy launched back in December 2024, sales there are forecast to keep shrinking for at least another quarter. Berenberg's view is blunt: rebuilding brand strength in China takes years, not a couple of good quarters.

The stock's math now tells the story on its own. Nike is down 47% year-to-date in 2026 and sits 81% below its all-time closing high from November 2021. According to FactSet data cited in the Berenberg coverage, only 26% of analysts covering the stock still carry a Buy rating — the lowest share in at least two decades.

For investors who already own NKE, this isn't a name to average down on reflexively. The company didn't even provide gross margin guidance for fiscal 2027, something Berenberg specifically called out as a red flag worth watching going forward.

If you're looking for a bottom, the signal to watch isn't the next quarterly print — it's China sportswear sell-through data and any update on gross margin guidance, which management conspicuously avoided this time around. Until both turn, the structural bear case holds.

For traders willing to bet on a longer-term turnaround, Berenberg's $27.50 target — built off applying Adidas's 20-year average valuation to Nike's 2029 earnings estimate — gives a concrete level to track against where shares actually trade. Nike isn't broken as a business, but right now it's priced like one still searching for the floor, and this downgrade just moved that floor lower.