Stifel cut its Nike earnings estimates for two straight fiscal years on Monday, the same day the sportswear giant loses its spot on the S&P 100, capping a stretch of setbacks that has erased half the stock's value.
Stifel analyst Peter McGoldrick lowered his earnings-per-share projections for Nike by $0.20 for both fiscal year 2027 and fiscal year 2028, Yahoo Finance reported. McGoldrick pointed to heavy discounting on Nike products across the United States, a sign, in his view, that demand for what the company is selling simply is not there.
The downgrade landed on the same day Nike was removed from the S&P 100 index, ending an 18-year run among the market's most prominent names. Nike shares have fallen 44 percent year to date and 51 percent over the past twelve months, trading around $36.06 on Monday. For a brand once synonymous with American athletic dominance, the numbers tell a story of steady erosion, and Wall Street sees no floor yet.
McGoldrick's note zeroed in on Nike's Hoops Classics line, the retro basketball sneaker segment that accounts for roughly 18 percent of total revenue. That segment continues to shrink, and the analyst argued that newer products have not generated enough consumer interest to fill the gap.
He also flagged Nike's leadership transition. CEO Elliott Hill, who returned to the company in October 2024, recently replaced the chief financial officer. With a new CFO settling in and an Investor Day scheduled for November 16, 17, McGoldrick concluded that management has no reason to raise expectations in the near term.
In his note, McGoldrick laid out the math plainly:
"Our hang-up on risk-reward remains on insufficient consumer demand for new products, while the Hoops Classics (18% of revenue) continues to shrink. A new CFO and the November 16-17th Investor Day give management no incentive to raise expectations near-term. At 17x [2027 calendar year price-to-earnings estimates] versus a footwear median of 11x, we see risk to the multiple if there's another delay to the turnaround timeline."
That valuation gap matters. Nike trades at 17 times its projected 2027 earnings, well above the footwear industry median of 11 times. McGoldrick's argument is straightforward: a stock priced for a comeback cannot afford another quarter of excuses.
McGoldrick was not alone. Evercore ISI analyst Michael Binetti issued his own bearish assessment, writing that Nike has offered no evidence its revenue trajectory is about to reverse.
"No hints yet that revenues can turn positive in the foreseeable future, we don't see a clear reason to expand the P/E [ratio] from here (from 22x FY27 consensus EPS)."
Two separate Wall Street firms, two separate analysts, the same conclusion: Nike's turnaround remains a promise, not a result.
The analyst downgrades did not arrive in a vacuum. Nike's recent quarter, fiscal fourth-quarter revenue reported in late June, came in at $11 billion. That marked a 1 percent decline on a reported basis and a steeper 4 percent drop on a currency-neutral basis. Diluted earnings per share hit $0.72, but $0.52 of that came from a one-time benefit tied to an expected tariff recovery. Strip out the windfall, and the underlying performance looks considerably weaker.
Nike projected fiscal first-quarter revenues would fall by low-to-mid single-digit percentages. The company reiterated flat earnings-per-share growth over the next three quarters, excluding tariff recovery benefits. Flat, in this context, is the optimistic scenario.
Then came the external blows. In late August, Dick's Sporting Goods issued a warning about its own business, attributing part of the pressure to Nike flooding the channel with discounted, slow-moving product. When your biggest retail partner tells investors that your markdowns are dragging down their margins, the promotional strategy has moved past aggressive and into damaging.
And last week, soccer star Kylian Mbappé ended his long-term endorsement relationship with Nike. He did not simply walk away from the brand, he walked to a competitor, announcing he would join Swiss rival On Holdings. On has been one of the hungriest challengers in the athletic footwear space, and landing a global soccer icon is exactly the kind of move that compounds Nike's problems.
Nike's ejection from the S&P 100 on Monday may not change the company's day-to-day operations, but it carries real weight. The S&P 100 tracks the largest, most liquid companies in the American market. Nike had been on that list for 18 years. Losing the spot is a public acknowledgment that the company's market standing has deteriorated enough to warrant demotion, a development that would have been unthinkable five years ago.
For index funds and institutional investors that track the S&P 100, the removal can trigger automatic selling, adding mechanical downward pressure on a stock that has already lost half its value.
Elliott Hill came back to Nike two years ago with a mandate to reverse the slide. He has reshuffled the C-suite, installing a new CFO whose name and start date the company has not publicly detailed. The November Investor Day is shaping up as the first major opportunity for Hill's team to lay out a concrete plan, with numbers, timelines, and accountability measures, rather than broad assurances.
Wall Street is not waiting patiently. McGoldrick's note made clear that another delay to the turnaround timeline could compress Nike's already stretched valuation multiple. Binetti's assessment was blunter: there are no hints revenue can turn positive in the foreseeable future.
The open questions are significant. What specific tariff action generated the $0.52 per-share windfall that padded last quarter's earnings? How deep and how long will the promotional discounting run? Can any new product line replace the shrinking Hoops Classics revenue? And can Hill's leadership team deliver results before the market's patience runs out entirely?
Nike built its empire on the idea that winners just do it. Right now, Wall Street is waiting to see if the company can do anything at all.