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UPDATE 1-Nike's road to recovery in North America likely a long one

(Updates with share reaction)

Sept 27 (Reuters) - Nike Inc's fight to claw back market share in an intensifying U.S. sneaker price war is still some way off bearing fruit, analysts said on Wednesday, a day after the sportswear giant reported its weakest quarterly sales growth in nearly seven years.

At least nine brokerages cut their price targets on the stock after Nike warned of a further fall in revenue in its biggest market following a 3 percent drop in the first quarter that was its first outright decline in 2-1/2 years.

Nike shares fell as much as 5 percent to $51.03 in morning trading, its lowest since mid June, and pulled down shares of rival Under Armour Inc.

Nike's stock was also the top percentage loser on the Dow Jones Industrial Average on Wednesday.

Analysts from some of the world's major brokerages remain upbeat on the company's plans to invest in a variety of different distribution channels but say it will happen too slowly to offset the growing battle for market share.

European rival Adidas AG has continued to snap at Nike's heels, even if the latter's North American business is still more than three times larger. Both face growing competition from others including Under Armour Inc.

"We are seeing price points on Nike, Adidas and Under Armour product that we never thought possible in N.America," Cowen & Co analyst John Kernan wrote in a note, cutting his price target on the stock to $50 from $53.

U.S. sports good chains have been shutting stores and cutting prices as fewer shoppers visit malls and online shopping grows.

Nike still gets about 70 percent of its revenue from retail customers but has been investing heavily in e-commerce, partnering with Amazon.com Inc and offering heavy discounts on its own website.

Tuesday's results showed a 6 percent rise in inventories, which suggests the company is building up more stock to sell through online channels but may also indicate lower sales through traditional outlets.

Gross margins fell 1.8 percent to 43.7 percent, pointing to greater discounting in a market Nike warned would shrink overall in the current quarter as more stores shut.

"We expect challenges to remain in North America for at least several more quarters," Moody's analyst Mike Zuccaro said. J.P. Morgan analysts said they expected the sales picture likely to get worse before getting better.

The spate of price target cuts by brokers lowered its median price target to $61.74, down 2.7 percent from just a month ago, Thomson Reuters data shows. Sentiment on the stock has been steady for three months, with 21 "buy" or higher ratings, 14 "hold" and 2 "sell", the data shows.

Susquehanna analyst Sam Poser was the most bearish on the stock after the results, cutting his price target by $7 to $47.

"Ultimately, we believe Nike's U.S. business will get back on track, but we are unsure how long it will take as we don't believe solutions are fully in place," Poser said. (Additional reporting by Ankur Banerjee; Editing by Patrick Graham and Arun Koyyur)