UBS Analyst Note on Nike Inc (Published 20‑09‑2026)

UBS analyst Jay Sole issued a research note warning of a high probability of significant earnings cuts and share‑price downside for Nike ahead of its first‑quarter fiscal 2027 results. The note lowered Nike’s 12‑month price target by 13 %, from $48 to $42, while maintaining a Neutral rating.

The brokerage projects that Nike will deliver first‑quarter FY2027 earnings per share (EPS) of $0.39, which is $0.05 below the Wall Street consensus of $0.44. For the second quarter, UBS expects guidance in the range of $0.31 to $0.43 per share, well under the consensus estimate of $0.53. UBS also reduced its full‑year FY2027 EPS estimate by 16 % to $1.30, compared with a buy‑side consensus expectation of $1.55. Options markets are pricing an 8.0 % stock move around the earnings release, reflecting bearish sentiment.

Sales Outlook Across Channels

  • North America Direct‑to‑Consumer (DTC): First‑quarter U.S. DTC sales growth is expected to fall in the mid‑single‑digit percentage range year‑over‑year, missing consensus expectations of a ‑0.4 % decline, driven by a pullback in core lifestyle franchises such as Dunks.
  • Greater China: Sales are forecast to drop 14.0 % YoY, pressured by reduced distributor participation in e‑commerce, elevated inventory levels, and a planned reduction of over 1,000 third‑party digital vendors starting in 2027.
  • Europe: European DTC sales declined 22.1 % YoY in the first quarter, with specialty retail checks indicating Nike is losing market share in lifestyle categories to competitors such as On, Hoka and Adidas.
  • Converse Brand: Converse sales are projected to slump 30 % YoY to $256 million.

Market Positioning and Valuation

Short interest in Nike shares has risen to a five‑year peak of 6.4 % of the equity float, making the stock heavily short‑crowded relative to peers and historical averages. Nike’s forward price‑to‑earnings multiple has contracted to 21×, down from its five‑year average of 34×. The note emphasizes that market participants may be underestimating the magnitude of the downward EPS revisions this earnings release could trigger.