On Friday, Bernstein SocGen Group maintained an Outperform rating for Nike stock (NYSE:NKE) with a steady price target of $102.00. The stock, currently trading at $71.74 and near its 52-week low, appears undervalued according to InvestingPro analysis. Following recent meetings with the company’s new CEO, Elliott Hill, and CFO, Matt Friend, the firm conveyed a strong positive outlook on Nike’s performance footwear segment. The discussions with Nike’s leadership revealed an emphasis on sports, with a focus on Running, followed by Football (soccer), Basketball, and Training. As a prominent player in the Textiles, Apparel & Luxury Goods industry with a market capitalization of $106 billion, Nike maintains strong fundamentals despite recent market challenges.
The leadership team at Nike expressed confidence in the company’s product pipeline for the 2025-2026 period, noting growing orders from retailers, which aligns with channel checks conducted by Bernstein. Despite this, the firm anticipates a gradual recovery in gross margins, currently at 44.73%, as Nike has guided them to the lowest level in two decades. The slower rebound is attributed to a shift in product mix from higher-margin lifestyle offerings to lower-margin performance gear, as well as more favorable terms being extended to retail partners. InvestingPro subscribers can access detailed financial health metrics and 12 additional ProTips that provide deeper insights into Nike’s operational efficiency and market position.
The transition towards performance footwear and away from lifestyle products suggests that the first half of fiscal year 2026 might see modest sales and margin growth, with improvements expected in the latter half. However, full strength is not anticipated until fiscal year 2027. With a P/E ratio of 22.18 and a dividend yield of 2.23%, Nike continues to reward long-term investors despite near-term challenges. Bernstein’s analysis indicates that while fiscal year 2026 expectations are conservative, the potential rewards remain appealing, particularly in the second half of the year. The reiterated Outperform rating and $102 price target reflect this optimism for Nike’s prospects. For comprehensive analysis including Fair Value estimates and growth projections, visit InvestingPro to access the full Pro Research Report.
In other recent news, Nike has been the subject of various analyst evaluations and revisions. BMO Capital Markets has maintained its positive stance on Nike, raising the price target from $92 to $95, reflecting confidence in Nike’s ability to navigate industry challenges. Similarly, Baird analysts also reaffirmed a positive outlook on the company, maintaining an Outperform rating with a $105 price target. They highlighted the potential for the company’s earnings estimates to have reached a low point and expressed confidence in Nike’s turnaround narrative.
On the other hand, Moody’s (NYSE:MCO) Ratings revised Nike’s credit outlook to negative from stable, citing the anticipation of a significant drop in operating income in the latter half of the fiscal year ending May 2025. However, Moody’s expects the strategies implemented by CEO Elliott Hill to eventually return the company to growth.
Piper Sandler upgraded Nike stock to Overweight from Neutral and increased the price target to $90, reflecting optimism about Nike’s future performance. Meanwhile, RBC Capital Markets adjusted its outlook on Nike shares, reducing the price target from $80 to $70 while keeping a Sector Perform rating, following Nike’s recent second-quarter fiscal year 2025 earnings report.
These are some of the recent developments in the analysis of Nike’s performance and potential.
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