Nike's (NKE) turnaround is likely to remain slow through the rest of 2026 as product progress, inventory cleanup, direct sales recovery and new growth drivers may take longer to have an effect, RBC Capital Markets said in a note Wednesday.

Nike is making progress under CEO Elliott Hill, including changes to the organization, wholesale business, sports-focused teams and running category, but product improvement is still not broad enough and Nike's revenue growth outlook remains weaker than the wider sector, which could point to further market share pressure, the investment firm said.

Nike needs better full-price direct-to-consumer sales, while tighter buying from Dick's Sporting Goods (DKS) and Foot Locker (FL) could affect underperforming styles in wholesale, RBC said.

The company could beat Q4 expectations if North America wholesale demand and World Cup-related orders are strong, but RBC said an improvement in direct-to-consumer sales is also necessary, but not as likely.

RBC downgraded Nike to sector perform from outperform and cut its price target to $50 from $70, saying there are limited near-term reasons for the stock to move higher.

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