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BTIG analyst Camilo Lyon downgraded Nike to Neutral from Buy without a price target. Supply chain and retail channel checks indicate "severe supply chain disruptions" emanating from the Covid-driven factory shutdowns in Vietnam that have worsened since Nike last reported on June 24, Lyon tells investors in a research note.

The analyst believes the risk of significant cancellations beginning this holiday and running through at least next spring has "risen materially" for Nike. The company 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 last year, says the analyst. Lyon estimates Nike's fiscal 2022 sales could be flat to up low single digits versus the current guidance of up low double digits.

The analyst downgrades the shares pending better visibility around timelines for a return to normalized production and shipping schedules.