Truist Downgrades Nike (NKE) to Sell, Citing Valuation & Worsening Fundamentals

Truist has downgraded Nike (NKE) to a 'Sell' rating, maintaining a $29 price target. The firm argues that Nike's recent 19% rally over the past month is due to sector rotation, not improved fundamentals [1].

Key concerns include:

• Valuation: NKE trades at 27x earnings (2 years out), nearly double its peer average [1].
• Sportswear Headwinds: Problems in classic franchises (Air Jordan 1, Air Force 1, Dunks) have spread across Sportswear and Jordan brands, which comprise over 60% of Nike's business [1].
• China Outlook: New CFO Dave Denton sharply cut the outlook for the region, with no clear catalyst for reaccelerating demand [1].
• EPS Cut: Truist cut its FY28 EPS estimate to $1.30, below the Street's $1.50 [1].

This downgrade signals potential downside risk for the sportswear giant.