Analysts cut price targets amid weak demand, softer traffic and China concerns.
- Truist downgraded Nike to Hold and cut its price target to $42, citing weaker footwear trends at DICK’S Sporting Goods.
- The firm wants more evidence of Nike’s turnaround, while the stock is down more than 38% this year.
- Goldman Sachs cut Lululemon’s price target to $111 from $122 while keeping a Neutral rating.
Nike (NKE), Lululemon Athletica (LULU) stocks are headed for weekly losses as fresh analyst caution adds pressure to the athletic apparel sector. Truist downgraded Nike and cut its price target, while Goldman Sachs lowered its Lululemon price target, citing weaker consumer demand, softer traffic, heavier promotions and slowing China growth.
Truist Downgrades Nike As Dick’s Results Cloud Turnaround
Truist downgraded Nike to ‘Hold’ from ‘Buy’ and reduced its price target to $42 from $47, still implying an 8% upside to the stock’s last closing price. Analyst Joseph Civello pointed to recent results from DICK’S Sporting Goods (DKS), saying the retailer’s weaker footwear trends make Nike’s turnaround harder to assess.
DICK’S lowered its fiscal 2026 outlook after weaker-than-expected second-quarter (Q2) results, with softness evident across its Foot Locker business. The retailer’s Q2 sales and earnings missed expectations, while comparable sales at Foot Locker declined 3.6%.
Truist now wants to see more evidence that Nike’s restructuring efforts are working and that its upcoming product launches can restore momentum. The firm is taking a wait-and-see approach until it gains greater visibility into Nike’s 2027 product pipeline. Earlier this month, JPMorgan also downgraded Nike to ‘Underweight’ from ‘Neutral’ and slashed its price target to $40 from $47. The firm expects Nike’s recent business decisions to hurt profits through fiscal 2028, including a potential $1 billion revenue loss in China.
Nike stock edged 0.3% higher overnight, ahead of Thursday. The stock has plunged over 38% this year, on track for its worst year since 1993. Nike has lost more than 60% of its market value since its November 2021 peak, and has delivered its weakest relative performance against the S&P 500 in roughly 25 years. Problems with direct sales, new product launches and wholesale strategy have hurt the brand, giving competitors more room to gain market share.
Lululemon Heads Into Earnings With Demand Concerns
Goldman Sachs analyst Brooke Roach also lowered her price target for Lululemon to $111 from $122 while maintaining a ‘Neutral’ rating, implying a 4% downside to the stock’s last closing price. Goldman said its Q2 tracking data points to continued challenges for the athletic apparel company.
The firm’s indicators show weaker card spending, consumer sentiment and store traffic. Higher promotional activity and slower growth in China are also making it more difficult to determine when demand will stabilize.
On Tuesday, UBS said it expects Lululemon to cut its fiscal 2026 earnings outlook again as weak sales in the U.S. and China weigh on results. The firm sees earnings falling by about $1.25 per share to $9.70-$9.90, marking the company’s second guidance cut for 2026. The athleisure company is set to report Q2 earnings on September 3.
NKE, LULU Stock: What Retail Investors Are Saying
On Stocktwits, retail sentiment around both stocks remained in ‘bullish’ territory.
A user said, “$NKE $123 Million stock repurchases. $2.4 Billion in stock dividends. NET INCOME $3.1 Billion. Looking good folks.”
Another user said, “ $LULU the stock has priced all bad news. Any positive print the stock moves 20-30 percent easy.”
NKE and LULU stocks have crashed 38.4% and 44% year-to-date.
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