CFRA analyst Zachary Warring underlined that Nike’s competitors could eat into some of the demand. “Although Nike maintains a fortress balance sheet with significant capital returns, we believe the multiple will trend back down to pre-pandemic levels as the company faces competition from brands like Hoka and On [Holding] while it looks for new growth drivers and focuses on cutting costs,” Warring said.

After posting softer-than-expected revenue guidance in its fiscal second-quarter earnings, Nike Inc. (NYSE:NKE) is banking on “newness and innovation” to drive growth. However, one analyst struck a discordant note, stating that its fastest-growing piece of business is at risk. What Happened: ‘Just Do It’ might not be working for Nike, but analysts were largely positive on the company’s prospects, with most ratings being “Buy,” “Outperform,” or “Overweight.” However, TD Cowen analyst John Kernan is not as optimistic about Nike’s strategy, casting doubt on the growth prospects of the sneaker maker. “Nike needs improved marketing outside of basketball, streetwear and lifestyle trends,” Kernan said in a research note on Friday, downgrading the stock from “Outperform” to “Market Perform.” “Nike faces disruption from smaller competitors in footwear and apparel. Jordan brand moving into lower price points and away from a scarcity model creates risk to the fastest-growing piece of the business,” Kernan