The lackluster year for Nike (NYSE: NKE) shareholders isn't going to turnaround anytime soon, according to experts at Goldman Sachs.
The firm lowered its rating for Nike shares to neutral from buy, citing an intense promotional environment for the company's products.
"The drivers of domestic pressure will take some time to work through, exacerbated by persistent excess inventory sitting at Nike's brick and mortar retail partners and the high visibility this markdown product gets as it is funneled online via amazon.com and other platforms," one analyst wrote in a note to clients Thursday.
"Near-term dynamics are challenging … with an inventory overhang in the U.S. hampering Nike's ability to 'reset' the market."
Nike shares have underperformed the market year to date with its shares up 3% through Wednesday, compared with the S&P 500's 14% return.
The analyst reaffirmed her $54 price target for Nike, representing 3% upside from Wednesday's close.
The analyst also noted that Nike's North American sales growth has deteriorated in the past year from 6% in fiscal first-quarter 2017 to a 3% decline in the most recent fiscal first-quarter 2018.
It’s a lot for investors and the company to take in, especially with Nike’s investor day set for this coming Wednesday, at which CEO Mark Parker, and other members of the executive management team will provide an overview of the Company’s long-term strategy and key initiatives to deliver sustainable, profitable growth.
Nike shares opened Thursday down 31 cents to $51.99, within a 52-week trading range of $49.01 to $60.53.
