Nike stock was resumed with an Underweight rating at Morgan Stanley as the research firm warned that Wall Street may be underestimating the sportswear company’s earnings risks. Analyst Alex Straton assigned Nike (NYSE: NKE) a $31 price target.
The rating and target are Morgan Stanley’s analyst views rather than company forecasts. Straton expects Nike’s earnings from the second half of fiscal 2027 through fiscal 2030 to fall below consensus estimates, reflecting a more cautious sales outlook and a slower recovery than the market currently anticipates.
Morgan Stanley Questions the Recovery Priced Into Nike Stock
The analyst highlighted Greater China as a particular source of pressure and argued that Nike’s valuation remains elevated relative to its changed growth and earnings profile. Morgan Stanley also pointed to a more fragmented global sportswear market, where established brands face competition from newer performance and lifestyle labels.
Nike’s latest full-year results showed fiscal 2026 revenue of $46.4 billion, flat on a reported basis and down 2% on a currency-neutral basis. Nike Brand revenue declined in Greater China and Europe, the Middle East and Africa, partly offset by growth in North America.
The cautious call on Nike stock will ultimately be tested by product demand, inventory management and the speed of improvement in China. Results could differ materially from Morgan Stanley’s projections, and a price target should not be interpreted as investment advice or a promised trading level.
