Bank of America downgrades Nike to sell, citing risks to turnaround

Bank of America has downgraded Nike to a sell rating, telling investors that the sportswear company's efforts to turn around its struggling business face significant and growing risk.

According to the bank's analysis, Nike is confronting challenges that make its recovery path uncertain enough to warrant caution from shareholders, prompting the recommendation to sell shares rather than hold or buy on the prospect of a rebound.

Nike has been working to reverse a period of underperformance that has weighed on its business, though the specifics of Bank of America's concerns were not detailed beyond the characterization that the company's situation is "very risky."

Analyst rating changes such as this one are closely watched by investors as a signal of institutional sentiment toward a stock, and a downgrade to sell from a major bank can influence short-term trading even when it does not reflect a company's full long-term outlook.

Nike shares are widely held across index and retail portfolios given the company's position as one of the largest sportswear and apparel makers globally, meaning shifts in analyst sentiment toward the stock tend to draw broad market attention.