Downgrade to Neutral as choppy business trends take time to work through
We downgrade NKE to Neutral from Buy and maintain our $54, 12-month price target. We expect shares to trade in a range as NKE works through excess inventory in the US, while valuation remains supported in the low-20s P/E. Next week’s investor day is an opportunity for management to lower its multiyear growth targets, which look stretched in the face of industry headwinds. While we do not see this event as an explicit negative catalyst, it is unlikely in our view to be a positive event.