The supply-chain concerns caused by Covid are about to become a major problem for Nike , according to investment firm BTIG. Analyst Camilo Lyon downgraded the apparel giant to neutral, saying in a note to clients Monday that it is facing serious production issues due to the spread of Covid in Asia. "We are downgrading NKE to NEUTRAL from BUY based on work we have done across the supply chain coupled with checks with our retail contacts, all of which point to severe supply chain disruptions emanating from the COVID driven factory shutdowns in Vietnam that have worsened since the company last reported on June 24," the note said. Nike said during its latest earnings report that it expected supply chain issues to continue into the 2022 fiscal year. However, the supply issues are so dramatic that they could take a serious bite out of Nike's holiday sales, BTIG said. "We believe the risk of significant cancellations beginning this holiday and running through at least next spring has risen materially for NKE as it is now facing at least two months of virtually no unit production at its Vietnamese factories which accounted for 51% of footwear and 30% of apparel units (43% of total units) last year," the note said. BTIG removed its $177 per share price target. The stock has trailed the broader market this year and is down almost 5% over the past month. -CNBC's Michael Bloom contributed to this report.
A man walks past the Nike logo seen in a window of a brand store in Kiev.
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The supply-chain concerns caused by Covid are about to become a major problem for Nike, according to investment firm BTIG.