Goldman analyst Lindsay Drucker Mann cut her rating for Nike Inc. (NKE - Get Report) to "neutral" from "buy" over concerns about near-term challenges with inventory overhang domestically and "signs of weakness" abroad, where Nike generates close to half its sales.

Mann said in a note Thursday, Oct. 19, that Nike could use its investor day next Wednesday, Oct. 25, to pedal back on some of its "stretched" multi-year targets "in the face of industry headwinds." Goldman added that although they don't expect the investor day to be "an explicit negative catalyst, it is unlikely in [their] view to be a positive event."

Nike's challenges in the U.S. will require time to work through, Mann noted. Products at brick-and-mortar locations plus on Inc. (AMZN - Get Report) and EBay Inc. (EBAY - Get Report) are often sold at marked down prices to reduce persistent excess inventory, but that creates an "obstacle" for Nike.

Mann added that Nike will face increasingly intense competition, but the oncoming threat from Adidas AG (ADDYY) isn't something Nike can't handle. Mann pointed to the lukewarm sales of Under Armour Inc. (UA - Get Report) Curry sneakers, even after a strong introduction.

Mann issued a $54 price target for Nike shares, which implies a 3.3% upside for shares from their closing price Wednesday, Oct. 18.

Nike stock fell 0.6% n early trading Thursday to $52. The stock has gained 2.4% since the start of the year, compared to the S&P 500 Index's more than 14% gains in the same period. 

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