Nike's 12-Year Low: GLP-1 Drugs and China Slowdown Fuel a Deeper Selloff
Published on 05/16/2026 at 17:24 | Redaktion boerse-global.de
The sell-off in Nike shares has gathered pace, with the stock hitting a 12-year trough of 36.02 euros on Friday — its weakest level since 2012. The damage so far this year stands at 33%, and the gap to the 200-day moving average has widened to more than 32%, a chasm that signals serious technical strain.
Wells Fargo has joined the growing list of bears, downgrading the stock from Overweight to Equal Weight and slashing its price target from $55 to $45. The bank pointed to the explosive uptake of GLP-1 weight-loss drugs as a critical factor. Patients shedding pounds may refresh their wardrobes, they argued, but the spending pattern shifts away from athletic footwear and apparel — precisely the categories where Nike dominates. The sportswear giant, in other words, risks missing the consumer lift that the drug revolution is creating.
China adds another layer of pain. Analysts expect sales in Greater China to drop by roughly a fifth in the current quarter, a decline driven by bloated inventory levels and a surge in demand for local challenger brands. The broader macro environment only compounds the pressure: rising bond yields and an oil price hovering above $100 a barrel are stoking inflation fears that weigh heavily on consumer discretionary names.
Should investors sell immediately? Or is it worth buying Nike?
The underlying numbers explain the gloom. In the fiscal third quarter, revenue stagnated at just over $11 billion, while net income collapsed to $520 million — a 35% drop in earnings per share. Tariffs ate into gross margins, and management has warned that the headwinds will persist. Against this backdrop, investor focus has shifted to the CEO's response.
Elliott Hill, who took the helm earlier this year, has declared a "Win Now" phase, centred on a strategy dubbed "Sport Offence" that aims to accelerate product launches. He has also quashed speculation about a sale of the struggling Converse brand, insisting it remains part of the portfolio despite its own revenue issues. Whether these moves can reverse the momentum is uncertain: the stock trades at 28 times expected earnings, a level many analysts consider stretched given the deteriorating profit outlook.
One bright spot remains the company's dividend record. Nike has raised its payout annually for 24 consecutive years, and at the current share price the yield approaches 4%. That history of consistent increases offers some reassurance to long-term holders, but the next test looms when the company reports quarterly results and executives must put a precise figure on the magnitude of the China slowdown. With the weight of GLP-1 medication and a shifting consumer climate pressing down, the recovery path looks steep.
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