With Nike Inc (NYSE:NKE) preparing to release fiscal fourth-quarter earnings on Thursday, June 29, Piper Jaffray analyst Erinn Murphy remains relatively cautious on the stock. The analyst reiterates a Neutral rating on NKE, with a 12-month price target of $50.00, suggesting a slight downside from today’s closing price.

Murphy explains, “While we continue to believe adidas’ brand resurgence will erode Nike’s ability to hold market share globally, three recent developments enhance our concerns. First, we believe adidas’ digital business growth (our favorite proxy for consumer demand) eclipsed Nike’s during the most recent quarter in dollar terms. Second, we have yet to see meaningful enough innovation at scale from Nike to alter the near-term category narrative and note FL spoke to VaporMax as one of a dozen key platforms for them this year, not a make-or break driver. Third, recent disclosure changes are lowering investor visibility as unit/$ futures are no longer being broken out and reporting segments will be reduced from six to four regions. Bottom line, we see FY18 EPS below the Street and increasing SG&A $ driven.”

Murphy pinpoints Nike’s rival, Adidas, has the upper hand in terms of dollar contribution to big-three North America (NA), Western European Union (W. EU) and China. The analyst expects a reasonable growth for both the sportswear giant and Adidas in W. EU, yet he is worried about Nike’s future revenue growth in China. Especially considering those figures slowed from 48% in 2016 to 34% during CQ1, which leads Murphy to believe Adidas will drive more than 100% of all big-three aggregate contribution growth in CY17E and CY18E.

Additionally, the analyst refers to the two strategic changes Nike has announced last week, which “increase our confidence a fundamental inflection is further away than bulls believe.” The first change is a switch from 6 geographic reporting segments in 2018 to 4 segments, which will lower clarity regarding regional reporting. Nike also disclosed it would cut 2% of its work force, or nearly 1400 jobs. Murphy expects this change to cause total sales to drop under management’s long-term CC growth outlook.

Overall, Piper Jaffray’s estimates are more bearish than those of the Street, with EPS of $0.48 in the fourth quarter compared to $0.50.

As usual, we advise taking analysts’ recommendations with a grain of salt. According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, Erinn Murphy is ranked #4344 out of #4573 analysts. Murphy has a 45% success rate and generates an annual yield of -5.5%. When recommending NKE, the analyst earns 2.0% average profit on the stock.

TipRanks analytics show NKE as a Buy. Based on 19 Wall Street analysts offering recommendations for this share, 9 issue a Buy, 9 maintain a Hold and 1 recommends a Sell. The 12-month average price target stands at $59, making a nearly 14.5% upside from where the stock is currently trading.