BUSINESS

Iraqi Kurdistan is concerned over the withdawal of U.S. air defenses, since this will leave the autonomous enclave completely exposed to Iranian and militia air attacks.

Nike stock (NKE) dropped about 44% this year, and the pressure is only growing as the company gets ready to report its fiscal 2027 first-quarter earnings on October 1.

The latest blow came from Bank of America. The bank pulled its neutral call on Nike and moved the stock to a sell rating.

BofA also told investors to expect the share price to fall even further before any real recovery shows up.

For anyone holding Nike shares, or thinking about buying while the price is low, BofA believes the recovery investors are hoping for might take longer than expected.

Bank of America pulls its support for Nike stock

Bank of America analyst Lorraine Hutchinson, who has covered Nike for years and previously held a more positive view of the stock, downgraded the shares to Underperform from Neutral. She also cut her price target to $30 from $47, which means BofA thinks the stock could fall another 17% from its recent price near $35.75.

Hutchinson had defended the stock for much of 2026, arguing that the bad news was already priced in.

That view has changed.

She told clients Nike’s recovery is “taking longer to materialize as weakness in its larger lifestyle categories outweighs progress from newer product launches,” according to a note reported by CNBC.

Hutchinson summed up the shift in three words: “Risks are rising.”

Nike sells fashion and sports gear under the Nike, Jordan, and Converse brands. It makes money through its own stores and website, and through retail partners like Dick’s Sporting Goods and Foot Locker.

When both sales channels slow down at the same time, the company’s revenue and profits take a hit.

Nike shares are down about 44% in 2026 as analysts pull back on expectations for the sportswear giant.winhorse / Getty Images

Nike’s older styles and retail partners are both struggling

BofA pointed to three problem areas. Nike’s classics business, which includes older, popular shoe styles that usually sell steadily without heavy promotion, is selling fewer items, and Nike’s newer products have not been strong enough to fill the gap.

Another issue is how Nike sells through other retailers. Nike has been shipping shoes and clothing to stores, but those products are not selling fast enough on shelves. When that happens, retailers tend to order less in the future, and that delays any recovery.

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The company’s China market is also struggling. BofA said the “China reset faces a tougher demand backdrop.” Chinese competitors Anta and Li Ning have been winning over local shoppers for eight straight quarters. That makes it harder for Nike to grow in one of its biggest markets outside the U.S.

Hutchinson also lowered her profit forecasts. She cut her fiscal 2027 earnings-per-share estimate by 11% to $1.43, and her fiscal 2028 estimate by 12% to $1.87. Her fiscal 2027 number now sits 14% below what most other analysts on Wall Street expect.

Sell ratings on Nike just hit a 30-year high

BofA is not the only one changing its mind about the stock.

JPMorgan analyst Matthew Boss, a veteran retail analyst, cut Nike to Underweight in August with a $40 target.

“Our timeline for NKE to return to a 10% operating margin now extends to FY29,” he told clients.

Boss believes it could take three more years for Nike to get its profit margins back to healthy levels. 

Oppenheimer and Barclays trimmed their Nike price targets this week, and Goldman Sachs also pulled back, according to Barron’s.

BofA’s new $30 target values Nike at about 16 times its expected earnings, down from its previous 22-times figure. That lower number treats Nike more like an average retail company than a premium global brand.

There is a counterargument worth knowing. A fair-value model from Investing.com puts Nike closer to $54, based on the stock trading near historically low valuations.

Investors will have to decide which side of the argument makes more sense, and the October 1 earnings report will give them fresh numbers to work with.

What Nike investors should watch in the first-quarter report

The upcoming earnings call will reveal how much of BofA’s bearish view is already playing out.

Analysts and investors will focus on how fast products are selling in North American stores, whether sales in China are still declining, and whether Nike can protect its profit margins. Order trends from retailers also matter, because they show what demand could look like six months from now.

Dividend investors have a separate concern. BofA warned that Nike is currently paying out more in dividends than it earns, which is not something the company can keep up for long. Nike’s management may hold the payment steady, but a dividend cut is possible if profits keep falling.

Nike CEO Elliott Hill has been direct about where the business stands.

On the company’s fiscal fourth-quarter call in June, he told investors, “Overall, the results aren’t there yet,” and added that customer demand in Nike Sportswear and Jordan Streetwear “remains challenged.”

A stronger update on those two areas next week could change the mood around the stock, while another weak report could push more analysts to downgrade.

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Artificial intelligence is starting to extend beyond answering inquiries and into purchasing, posing a new challenge for financial firms that drive Americans’ purchases.

Synchrony Financial (SYF) doesn’t want to be left behind.

The consumer-finance giant is prepared for a future where more buyers use personal AI assistants to find items, compare deals, and perhaps make transactions, according to a Sept. 25 BofA Securities research note seen by TheStreet.

BofA analyst Mihir Bhatia recently met with Synchrony Chief Financial Officer Brian Wenzel at investor meetings in Los Angeles and San Francisco. AI becomes a prominent topic in almost every discussion, the note said.

For Synchrony, the immediate focus isn’t letting an AI assistant take over a customer’s bank account. It’s about ensuring that the company’s credit products, incentives, and financing offers are presented when customers ask AI tools what to purchase.

That approach is not just a theory. In August, Synchrony launched an enterprise cooperation with OpenAI to incorporate financing, incentives, and loyalty into AI-native shopping and checkout experiences. The company said the partnership is part of a plan to prepare for agent-driven commerce.

Meanwhile, Synchrony’s core consumer-finance business is reasonably solid, despite affordability worries and increased gasoline costs.

BofA reiterated its Buy rating and $89 price target on Synchrony, which implies a 24.4% upside from the $71.55 price in its Sept. 25 research report.

Synchrony wants its financial products inside AI shopping

Synchrony’s immediate AI strategy centers on what management calls “discoverability.”

As consumers increasingly turn to AI tools while shopping, Synchrony wants its financing options, rewards programs, and promotional offers to appear within those experiences, BofA said.

Synchrony’s public-facing collaboration with OpenAI supports that larger strategy. In August, the company said it intends to deploy OpenAI software across the enterprise and is working to embed financing, rewards, and loyalty into AI-native commerce. Artificial intelligence can change everything from product discovery to payments and rewards.

The cooperation will also feature a Synchrony ChatGPT plugin meant to help users find discounts and specials and search promotional financing, deals, and other offers from participating Synchrony partners.

And it might become more essential if AI assistants progress from suggesting items to actually assisting people in making purchases.

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BofA said Synchrony is investing in the right areas to be involved in personal AI helpers and agentic commerce. The business is also teaming up with merchants to provide promotional terms, discounts, and preferred financing options via AI-enabled shopping experiences.

The goal is simple: When a customer asks an AI assistant to discover a product, Synchrony doesn’t want its financing offer to vanish from the purchase decision.

“Discoverability” is Synchrony’s near-term focus, according to BofA.

The company thinks customers may be especially hesitant to relinquish control over major, discretionary purchases.

Someone buying furniture, paying for dental work, or making another significant purchase may still want to browse products and choose exactly how to pay.

And Synchrony’s present business is exactly this type of purchasing. The corporation works in segments from home and car to health and wellness, lifestyle, and internet commerce. Its public filings indicate a company based on credit programs provided via retailers, merchants, manufacturers, and healthcare providers.

Payment choices add another layer of intricacy.

Even if the AI agent recommends some alternative payment option that provides a higher instant discount or cash-back incentive, a shopper may choose a specific rewards card. So automated buying is more sophisticated than just finding the cheapest price.

Synchrony is preparing for agentic commerce, but customer behavior will determine its speed.

AI is also being used inside the organization. Synchrony expects more chances to employ the technology in dispute resolution, merchant onboarding, underwriting, and fraud protection, BofA added.

Synchrony’s current underwriting system is already quite automated. The company’s annual filing says it normally evaluates applications with automated underwriting systems that look at information including credit bureau data, prior Synchrony performance, and partner information.

Synchrony also employs models and other technologies to identify and prevent fraud.

Major lender prepares for AI to reshape how Americans shop.NurPhoto / Getty Images

Synchrony says the U.S. consumer remains resilient

The AI discussion comes as Synchrony’s legacy business provides a glimpse into how American consumers are coping with ongoing affordability pressures.

BofA said Synchrony told investors U.S. consumers are generally stable, despite concerns about higher gasoline prices and interest rates.

Public company data backs up that picture. Purchase volume in the second quarter was $49.8 billion, up 8% year over year, while loan receivables rose 2% to $102.2 billion. Average active accounts were about flat at 68.3 million. The company also returned $950 million to shareholders during the quarter.

BofA’s follow-up meetings indicated the third-quarter purchase-volume increase was tracking about in line with the second-quarter 8% pace. That compared with a Street expectation of 6.8%, BofA said.

The image is not uniformly strong everywhere. Synchrony advised BofA that super-prime customers continued to have the greatest spending patterns. Prime customers had become better. Non-prime was still a little weaker, but it wasn’t seen as a major cause for concern.

Larger discretionary purchases were the only noteworthy weak area. BofA notably pointed to outdoor items, furnishings, dentistry services, and health and well-being.

Synchrony’s large retail network also exposes it to several of those expenditure areas. The bulk of its 2025 filing is interest and fees on loans, which lists its five largest programs as Amazon, Lowe’s, PayPal, Sam’s Club, and TJX. Those programs accounted for 54% of total interest and fees on loans in 2025.

Those relationships are still growing.

In April, Synchrony confirmed an expanded relationship with Lowe’s, becoming the issuer of MyLowe’s Pro Rewards American Express Card. The card can be used everywhere American Express is accepted, not just at Lowe’s, continuing Synchrony’s relationship with professional home-improvement customers.

Synchrony’s filings also show that it completed the acquisition of Lowe’s commercial co-branded credit card portfolio in April. The acquired portfolio contained approximately $700 million of outstanding loan receivables.

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Programs like these help explain why management expects loan growth to pick up.

BofA said Synchrony was on track to achieve its mid-single-digit loan growth guidance for 2026. The bank cited rebuilding consumer balances, the Walmart portfolio, and increased penetration at retail partners as possible drivers.

The company’s public financials already show loan receivables were $102.2 billion at the end of the second quarter. The buying volume for the first six months in 2026 was $92.8 billion.

The credit performance, though, might be the more relevant barometer for investors worried that rising costs of living are nudging borrowers toward trouble.

Synchrony has told BofA so far that it is not seeing any serious deterioration.

Synchrony isn’t seeing consumer credit stress yet

Synchrony informed investors that credit performance is robust, with no material evidence of stress, even in subprime loans, said BofA.

Higher fuel costs are a danger, especially for lower-income customers, but management said it had not seen troubling shifts in consumer behavior.

Subprime borrowers represent about 26% of Synchrony’s portfolio, down from its longer-term range of 28% to 30%. Synchrony anticipates that share to slowly normalize as lending grows, which might lift loss rates marginally.

Meanwhile, Wall Street sees another possible AI disruption: deposits.

Investors were pondering whether AI agents may one day automatically transfer consumers’ cash across banks to earn greater interest rates. Synchrony disagrees, saying the transition is far further off.

The company’s typical deposit account is roughly $50,000, and management feels clients may be reluctant to let autonomous AI agents administer such significant quantities, BofA said.

Deposits are key to Synchrony’s operations. At the conclusion of the second quarter, deposits accounted for 83% of the company’s financing, totaling $82.8 billion.

Synchrony also stated that even when the firm doesn’t have the best rate on comparison sites, users still choose it. This demonstrates that in addition to yield, brand, safety, and convenience might be important, too. Another hurdle to entirely autonomous deposit movement are regulatory obligations, particularly know-your-customer standards.

For now, Synchrony regards the AI-led deposit shift as a longer-term evolution.

That’s a whole other matter than shopping. AI will soon decide which products buyers see and which financing deals they receive. Already, Synchrony’s work with OpenAI is setting the company up for that shift, embedding financing, incentives, and loyalty within AI-native purchasing experiences.

The difference matters. Consumers may be ready to let AI help them buy well before they’re prepared to let it govern their finances.

The immediate potential for Synchrony isn’t having AI transfer customers’ money. AI is guiding their spending, ensuring Synchrony’s financing and incentives are there when they need them.

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Lowe’s has entered a partnership to roll out a new service for customers as it faces weak demand in its stores. 

In the second quarter of this year, the home-improvement chain’s comparable sales only increased 0.2% year over year, according to its latest earnings report. A recent Placer.ai report also revealed that average customer visits per Lowe’s location declined 0.4% year over year during the quarter. 

On an earnings call in August, Lowe’s CEO Marvin Ellison said customers continue to feel the weight of economic pressures, including inflation and a stagnant housing market.  

“Elevated fuel prices combined with broader economic uncertainty have influenced household budgets,” said Ellison. “Customers continue to tell us that they are being cautious about their spending and prioritizing where and when they invest in their homes. As a result, discretionary DIY demand remains under pressure.”

Lowe’s introduces drone delivery 

Against this backdrop, Lowe’s has launched drone delivery, a move aimed at helping customers complete home improvement projects faster by expanding same-day delivery, according to a new press release.

The home-improvement chain has partnered with DoorDash and Alphabet’s Wing to offer this service, which delivers select home improvement items directly to customers in as little as 20 minutes. Lowe’s is now the first home improvement retailer to offer drone delivery. 

Lowe’s is currently only piloting this service at a store location in Matthews, N.C., where customers can have eligible products, including hand tools, tape, batteries, paint products, and all-purpose cleaner, delivered via drone. 

The retailer states that customers can access the service using the DoorDash app, which automatically displays the drone delivery option “if the delivery address is eligible near the Matthews, N.C. Lowe’s store.”

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It is also important to note that Wing drones currently transport orders weighing approximately 2.5 pounds per flight.

“By piloting drone delivery, we’re addressing a real project pain point with an innovative solution that is integrated into the retail journey, giving our hometown customers next-generation fulfillment right when they need it,” said Seemantini Godbole, chief information and AI officer at Lowe’s, in the press release. 

The launch of Lowe’s new drone delivery service comes after its free, same-day delivery options helped drive online sales in the second quarter of this year. 

“We drove steady momentum in our same-day fulfillment offering during the quarter as more and more customers take advantage of our delivery options to keep their projects moving,” said Joseph McFarland, Lowe’s executive vice president of stores, on the company’s earnings call in August. 

“By giving customers another fast and convenient way to access our broad assortment, same-day fulfillment is becoming an increasingly important part of the Lowe’s omnichannel experience,” he continued. 

The move also rivals Home Depot, which rolled out Express Delivery at over 2,000 stores nationwide in August, allowing customers to have Pro and DIY essentials delivered in 3 hours or less.

Lowe’s launches drone delivery in Matthews, N.C.hapabapa / Getty Images

The housing market problem weighing on Lowe’s sales

Lowe’s is betting big on delivery at a time when the housing market continues to put pressure on its sales.

On the company’s August earnings call, Lowe’s Chief Financial Officer Brandon Sink emphasized that customers are focusing on tackling smaller DIY projects rather than larger remodeling jobs due to housing market headwinds. 

“Affordability remains kind of the major concern, and that’s across rates, it’s across home prices, insurance, taxes,” said Sink. “And that’s really translating to prioritization of repair and maintenance spend and the projects that our consumers are engaging in, and this ongoing trend of caution around big ticket discretionary.”

At the start of 2020, 30-year fixed U.S. mortgage rates averaged below 4%. When the Covid pandemic set in, rates fell to a weekly low of 2.65% in January 2021, the lowest it’s ever been, according to a Bankrate analysis. 

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However, mortgage rates began rising in 2022 when the Federal Reserve started hiking its benchmark interest rate to combat inflation. By October 2023, the average 30-year mortgage rate had surpassed 8% for the first time since 2000.

Since then, mortgage rates have averaged between 6% and 7%, and they continue to climb.

Recent Freddie Mac data show the average 30-year fixed-rate mortgage reached 6.67% in August, up from 6.54% in July.

Existing-home sales also declined by 2% month over month in August, while the median existing-home price rose 1.6% from a year earlier to $429,100, according to recent data from the National Association of Realtors. 

“Mortgage rates and home sales move in opposite directions, so it’s not surprising to see a mild dip in home buying activity due to high mortgage rates,” said Lawrence Yun, National Association of Realtors chief economist, in a press release. 

In an August Investing.com report, Bryan Hayes, an analyst and strategist at Zacks Investment Research, said that “housing turnover is the single-most important driver of home improvement demand, because people renovate when they buy and when they sell.”

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Coca-Cola has not been kind when it comes to getting rid of slower-selling flavors, even when they have a dedicated fanbase.

The most famous example of that is the company’s 2020 decision to stop making TaB, its first diet soda.

That inspired the SaveTaBSoda Committee, a group of fans of the diet beverage who want to force Coca-Cola to bring it back.

“We’re TaB drinkers on a mission to save our soda. The SaveTaBSoda Committee was formed in October 2020, shortly after the Coca-Cola Company announced the planned discontinuation of TaB soda,” the group shared on its website.

Coca-Cola has not given in, despite a protest at the company’s headquarters, a petition, and multiple other efforts to force the company to bring back the classic soda.

That doesn’t mean Coca-Cola never brings back a classic flavor. The company has two cult-favorite holiday sodas, and one of them was discontinued in 2021. Another was canceled in 2018, but a variation of it will make a 2026 return to shelves.

Coca-Cola Cinnamon is not coming back

Coca-Cola Cinnamon, introduced in 2019, was a limited-time offer for the Christmas season. The company trumpeted the flavor in a 2019 news release, which is no longer on the company’s website.

“Coca‑Cola also is spicing up the season with the limited-edition launch of Coca‑Cola Cinnamon, which blends the delicious taste of Coca‑Cola with a warm cinnamon flavor associated with the holidays,” the company wrote.

The company brought back Cinnamon Coke in 2020 but not in 2021. It has not returned since.

In 2023, Coca-Cola ignored a request from TheStreet for a comment on the fate of Coca-Cola Cinnamon.

Coca-Cola has discontinued many sodas over the years.Shutterstock

Coca-Cola brings back another holiday classic

In 2013, Coca-Cola introduced Sprite Cranberry for the holiday season.

“Both products take the refreshing taste of traditional Sprite and combine it with a splash of sweet and tart cranberry notes,” the company shared in a press release.

It was the first new Sprite flavor since Sprite Remix in 2005.

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“We’re incorporating one of the most popular flavors of the season with the No. 1 lemon-lime brand to celebrate the holidays,” Sprite Brands executive Kim Paige said at the time. “Over the years, our fans have increasingly demanded Sprite with cranberry flavor, and we’re excited to give it to them with the crisp, clear, caffeine-free, naturally flavored taste they already love about Sprite.”

That flavor was brought back every year seasonally until 2018, when it was discontinued. In 2019, however, Coca-Cola introduced a new take on the drink, Winter Spiced Cranberry.

“Coca-Cola changed the classic Sprite Cranberry — which had been a holiday staple for six years — to a new warm spice- and cranberry-flavored lemon-lime soda. The holiday Sprite became an immediate favorite,” Allrecipes reported.

While the new variant has appeared every year since the old one was killed, Coca-Cola had not commented on whether it will return this year. Several social media accounts that track beverage releases have, however, confirmed the return.

“Holiday soda season is coming very soon! Coca-Cola Holiday Creamy Vanilla and Sprite Winter Spiced Cranberry are both set to return in mid-October 2026, including Zero Sugar options,” Snackwire reported.

All Things Hallows, which covers seasonal product releases, also reported on the return.

“Sprite Winter Spiced Cranberry: The seasonal favorite returns in Original and Zero Sugar,” it shared on its Facebook page.

Kroger has added a page listing the returning Sprite, but it’s still showing as unavailable. Walmart also has a product listing, but it shows no stock.

Pepsi’s holiday classic can’t return

In 2023, Pepsi discontinued a holiday favorite by killing the entire brand it was part of.

PepsiCo dropped its entire Sierra Mist product line. That meant Sierra Mist Cranberry Splash was quietly killed as the company replaced Sierra Mist with Starry as its lemon-lime soda. 

It won’t prevent Pepsi from offering a seasonal flavor this winter, according to Sodaseekers, a top Instagram page covering the beverage industry.

“The newest Pepsi holiday innovation is almost here! The product images seen here came from an official database, confirming this release,” the Instagram page wrote next to pictures of Pepsi Vanilla & Cream, in full and Zero Sugar.

It will be released in October and is expected at all Pepsi retailers, the site reported.

Sporked also confirmed that Pepsi would be releasing a Vanilla & Cream flavor.

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Amazon is one of the biggest employers in the U.S., and has more than 1.58 million employees worldwide.

The company’s enormous workforce is central to its ability to move millions of packages and keep its sprawling retail operation running. 

But Amazon’s reputation as an employer has also faced scrutiny.

The company has dealt with criticism over warehouse working conditions, including concerns about repetitive physical work, injury rates, and the pace at which employees are expected to perform their jobs. 

In 2024, the U.S. Department of Labor announced a settlement with Amazon requiring the company to implement an ergonomics program across its fulfillment, sortation, and delivery facilities. 

The agreement followed multiple OSHA investigations into ergonomic hazards and included a $145,000 penalty. 

Now for a company like Amazon, $145,000 is pocket change. But Amazon also needs to be mindful of its reputation as an employer. And that’s why the company’s latest compensation decision is a smart choice.

Amazon raises its starting wage

Amazon announced that it will increase pay by $1 an hour for eligible employees, bringing the minimum starting wage for full-time employees in its core operations to $20 an hour. The company said the increase brings its average starting wage to about $24 an hour. 

The company is also rolling out additional benefits, including grocery discounts for U.S. employees and a new banking benefit through First Tech Federal Credit Union. 

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The wage increase makes sense for Amazon, despite the obvious cost.

Amazon operates an extraordinarily large logistics network. And retaining experienced workers could help reduce the costs and disruption associated with constantly hiring and training replacements. 

Research published in the Journal of Labor Economics found that employee turnover creates costs through short-staffing, onboarding, and effects on existing workers. Enticing workers to stay on board with higher pay makes sense for a company like Amazon whose reputation hinges on being able to deliver fast, reliable service.

“I’m excited about how these investments work together to help our employees and their families continue to thrive for the long run,” said Udit Madan, Senior Vice President, Amazon.

“And while there’s always more work to do, I’m proud that we’re continuing to find new ways to support our team, both at work and beyond.”

Amazon

Amazon’s decision is a page out of the Costco playbook

Amazon’s decision also brings to mind one of the retail industry’s best-known examples of paying frontline employees relatively well: Costco.

Costco has built a reputation for competitive wages and benefits. In 2025, the warehouse club raised its minimum starting wage to at least $20 an hour for entry-level positions in the U.S. and Canada. 

The company also raised the top of its wage scales, and its average hourly rate for U.S. hourly employees reached approximately $32 by the end of fiscal 2025. 

Costco said that approximately 94% of its U.S. and Canadian employees who had been with the company for at least one year remained with the company in 2025. Competitive compensation and benefits help minimize turnover and increase employee productivity and loyalty. 

But higher wages don’t just benefit workers. There’s a potential benefit for shoppers, too.

Experienced retail employees can develop greater familiarity with their stores, products, and customers, while lower turnover can reduce the disruption and training costs associated with constantly replacing workers. 

Costco has long tied its employee strategy to the customer experience. Management says taking care of employees is fundamental to its business model, so it pays to invest in higher wages.

Amazon has a very different business from Costco. Its vast fulfillment network, delivery operation, and technology infrastructure create a different set of workforce demands.

Still, the basic idea is similar: Pay employees enough to make jobs more attractive, give workers a reason to stay, and potentially create a more experienced workforce.

For Amazon, that could prove especially valuable as it heads into the crucial holiday shopping season. 

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The Costco comparison doesn’t mean Amazon has adopted Costco’s entire employee strategy. But by pushing its starting wage to $20 an hour, Amazon is increasingly competing on one of the same factors that has helped make Costco a notable and desirable employer in the retail industry.

Maurie Backman owns shares of Amazon and Costco.

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