Nike Stock Slips as S&P Downgrades Credit Rating
Key takeaways
- S&P’s downgrade of Nike to A with a negative outlook signals a tougher recovery ahead, weighing on the stock and tightening the company’s financial flexibility.
- Nike’s rating downgraded from A+ to A
- Negative outlook added
- Revenue decline >7% in fiscal 2027
What happened
S&P Global Ratings downgraded Nike Inc. (NYSE: NKE) from A+ to A with a negative outlook, citing weaker revenue, profit and cash flow projections, especially in China and its sportswear/Jordan lines. The downgrade also lowered Nike’s unsecured debt rating to A and flagged potential future cuts if the company fails to stabilize its business. Nike’s shares fell 0.35% to $33.72 on the day of the announcement.
Why it matters
The downgrade signals that S&P now expects Nike’s recovery to take longer and that the company faces higher leverage and cash burn. It raises concerns about Nike’s ability to maintain free cash flow at 25% of debt and could lead to a further rating cut within 12–24 months. The negative outlook may pressure investors…
Short-term and longer-term
Short-term. Nike shares dipped 0.35% to $33.72 following the downgrade, reflecting short‑term pressure from the negative outlook.
Longer-term. Over the next few months, investors should monitor Nike’s ability to curb cash burn and improve leverage, as the negative outlook hinges on reaching 25% free cash flow relative to debt.