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Nike downgraded to sell at BofAML on rising market share losses to Under Armour

A customer browses Nike sneakers for sale inside a Foot Locker store on the Third Street Promenade in Santa Monica, California.
Patrick T. Fallon | Bloomberg | Getty Images

Bank of America Merrill Lynch on Monday warned investors to stay away from Nike, downgrading the stock to underperform from neutral, on rising competition and a lack of innovative products on the horizon.

"We now expect Nike's market share loss to Adidas and Under Armour to continue through 2017 as our meetings with manufacturers/suppliers and competitors indicated a potential narrowing of the innovation gap for Nike's pipeline relative to the competition compared to historical levels, in our view," equity analyst Robert Ohmes wrote in a research note.

This year, shares of Nike are down 17 percent as high inventory figures and investors' concerns over future orders have driven the stock to a 52-week low.