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Nike Inc. could face further earnings pressure and stock price weakness when it reports fiscal first-quarter 2027 results, according to UBS, which sees the upcoming earnings release as a potential negative catalyst.
UBS analyst Jay Sole cut the firm’s 12-month Nike price target by 13% to $42 from $48 while maintaining a Neutral rating. UBS forecasts first-quarter earnings per share of $0.39, below Wall Street’s consensus estimate of $0.44.
The bigger concern is Nike’s outlook. UBS expects management to provide weak fiscal second-quarter guidance and potentially lower its full-year 2027 expectations ahead of the company’s November investor day. The firm projects second-quarter EPS guidance of $0.31 to $0.43, compared with the $0.53 consensus estimate.
Sole said investor sentiment toward Nike is already bearish, but the market may still be underestimating the size of potential downward earnings revisions. Options markets are pricing in an approximately 8% move in Nike shares around the earnings announcement.
UBS channel checks also point to weakening demand across several important markets. Nike’s U.S. direct-to-consumer sales are expected to decline by a mid-single-digit percentage year over year, compared with consensus expectations for a 0.4% drop. Weakness in core lifestyle products such as Dunks is contributing to the slowdown.
Greater China sales are forecast to fall 14% year over year amid elevated inventories, reduced e-commerce distributor participation and plans to remove more than 1,000 third-party digital vendors beginning in 2027. European DTC sales declined 22.1% based on transaction data, while Nike faces increasing lifestyle competition from Adidas, On and Hoka. Converse revenue is projected to plunge 30% to $256 million.
Meanwhile, short interest in Nike has climbed to a five-year high of 6.4% of its equity float. Nike’s forward price-to-earnings ratio has fallen to 21 times from a five-year average of 34 times.
UBS also cut its fiscal 2027 EPS estimate by 16% to $1.30, below the buy-side consensus forecast of $1.55.
