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Pro Analysis

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
A customer browses Nike sneakers for sale inside a Foot Locker store on the Third Street Promenade in Santa Monica, California.

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.