Nike Stock has plummeted recently, an indicator that investors aren’t too confident in the companies future. The company has been a dominant player in the sports apparel and shoe market for years, but many question if the company is going to keep strong market share and performance in the near future.
Nike Stock Plummets
Many banks will rate company stocks to indicate to investors whether or not purchasing that stock would be a good idea. Recently Citi Bank downgraded Nike stock from “Buy” to “Neutral”, which raises some concerns. Analyst Paul Lejuez wrote “we attended a sell-side event to meet with new CEO Elliott Hill… After discussing the key building blocks and challenges to achieve a turnaround, we no longer believe [fiscal year 2026] will inflect the way we hoped, either on the sales or [earnings before interest and taxes] margin line.”
As Lejuez noted, Nike has undergone a significant leadership change. In January 2020, John Donahoe retired as the company’s CEO, and passed the torch to Elliott Hill. Hill and his team put together an ambitious plan for the company, trying to be more obsessed with sport. Previously, the company had marked products down in price to make products more affordable and accessible. Hill, however, is going against this and is focusing on selling premium sporting products.
Nike is facing “topline pressures” that “seem likely to continue as they manage down key franchises”, according to Lejuez. Citi has been patient for Nike stock and performance to make a change for the better, but they seem tired of waiting.
Growing Concerns
Nike Stock has fallen the past few years as the company has lost market share specifically in the running space. Competitors such as On and Hoka overtook the shoe giant in the past few years, and Nike executives expect the company will have to fight to get back on top. While there are other markets where Nike performs well in, the company certainly will have to fight off pressure with performance. Others point out concerns that one of Nike’s largest partners, the NBA, is seeing significant decrease in viewership this season.
Jefferies analyst Randal Konik stated that Nike needs a “Cadillac-type change.” Konik acknowledges that Elliott took over a company that was “in a bad spot”, but it seems that so far, Elliott has not enough has been done to convince investors.
2025 may be a defining year for Nike stock and the company. Will they be able to come back and dominate the market again? Or will this be one of the greatest fall in American stock history? Let us know your thoughts in the comments.
