With quarterly reports being released soon, two of the most recognized brand name stocks Apple Inc. (NASDAQ:AAPL) and Nike Inc (NYSE:NKE) are facing pressing challenges. Below, analysts discuss the slowdown in sales of Apple products and the increased competition that Nike is experiencing.

Apple Inc.

Analyst Jeff Kvaal of Nomura Group expressed his long-term views on Apple in the midst of a fiscal year where Apple may not reach expectations. The analyst explains that the technology giant will face several challenges in the remainder of 2016 but will bounce back thereafter.

The analyst cites his opinion that expectations for F4Q sales are too optimistic and over the next two quarters demand for Apple products, outside of the iPhone SE, will slip. The analyst feels the iPhone SE has cannibalized Apple’s other products, especially the iPhone 6s, due to a record low upgrade rate and SE sales exceeding 2016 expectations by 10-20 million units. Kvaal stresses that SE sales will continue to show growth as it begins to reach “its intended first-time buyer market in China.” Apple is benefiting from a more efficient production process of iPhone SEs and has gotten lead times down to 4-8 days in the US and 3-5 days in China. The analyst expects “Apple to bring [SE] supply back into line with demand near the end of June.”

Kvaal anticipates a strong first quarter next year that will offset his expectations for low sales in F3Q and F4Q. He expects Apple to easily reach his sales estimate of 75 million phones in the first quarter with the replacement rate expected to recover to 8% and AT&T rolling out a new promotional schedule for the 4Q. Additionally, the analyst feels Apple will be able to hold its “90% retention rate, grow the iOS base, and ultimately restore unit growth” due to new features that are improving the user experience across devices.

In spite of the Kvaal’s expectation of a difficult end to Apple’s fiscal year, he has a positive view for 2017 and therefore maintains his Buy rating on Apple with a price target of $120, marking a 26% increase from current levels.

According to TipRanks, Jeff Kvaal has a success rate of 52% and an average return of 9.3% per recommendation.Kvaal stat

Out of the 38 analysts on TipRanks, who have rated the company in the past 3 months, 84% gave a Buy rating, 13% gave a Hold rating and 3% gave a Sell rating. The average 12-month price target for the stock is $123.97, marking a 29.26% upside from current levels.

Nike Inc

Merrill Lynch analyst Robert Ohmes expressed his uncertainties regarding Nike prior to the release of its F4Q16 earnings next week, scheduled for June 28 after market close. The analyst points to increasing competition as Nike’s biggest risk for growth.

The analyst expects Nike to report F4Q16E EPS of $0.48, revenue growth of 6.0%, and a 30bps decline in EBIT margins thanks to strong momentum in casual footwear, increased distribution in department stores, and increased trends in Europe and China. However, he warns that this momentum may be partially outweighed by increasing competition in North America. The continuing rise of Under Armour and the reemergence of Adidas has caused Nike to lose footwear market share in North America for the first time in 6 years. Additionally, Nike now has to compete with Under Armour and Adidas for endorsements and key industry talent more than ever before. Looking forward, Ohmes predicts that Nike will maintain its F2017 outlook with “high-single digit revenue and low-teens EPS growth.”

Sell-through rates for Nike’s technical platforms of Free, Lunar, Air Max and basketball shoes have been decreasing as the market taste is turning to cheaper casual and retro styles. This shift comes with the risk of losing market share to non-technical styles from other brands. Ohmes feels that this slow down in sell-through rates is forcing Nike to accelerate “its inventory clearance through aggressive product returns from retailers” and thus pushing down futures and revenue growth.

The analyst expects international FX headwinds to decelerate after the Summer Olympics and EuroCup shipping windows as “comparisons turn tougher in key markets and Nike laps the implementation of category offense in Western Europe and an extremely successful market reset in China.”

Ohmes maintain his Neutral rating on Nike with a price objective of $60, marking an increase of 9.5% from current levels.

According to TipRanks, Robert Ohmes has a 48% success rate and an average return of 1.6% per recommendation.

Out of the 17 analysts on TipRanks, who have rated the company in the past 3 months, 71% gave a Buy rating and 29% gave a Neutral rating. The average 12-month price target for the stock is $68.25, marking a 24.61% upside from current levels.