On Friday, Bernstein, a research group within SocGen, adjusted its outlook on Nike Inc. (NYSE:NKE), reducing the price target to $102.00 from the previous $109.00. Despite the price target cut, the firm maintained its Outperform rating on the athletic apparel and footwear giant. According to InvestingPro data, Nike's stock currently trades at $77.10, down nearly 28% year-to-date, with 12 analysts recently revising their earnings expectations downward.
The revision follows Nike's second-quarter earnings report, which, according to the firm, showed satisfactory performance. However, the outlook for the second half of the fiscal year was significantly lowered. The adjustment in guidance is attributed to the need for more aggressive discounting strategies for the company's Lifestyle product line, which has not been turning over as quickly as expected.
The recent appointment of a new CEO at Nike has set a different tone for the company's strategy moving forward. Bernstein anticipates that Nike will introduce robust product offerings and marketing initiatives in Spring 2025, which are expected to reinforce investor confidence in the brand's recovery.
Despite the positive second-quarter results, the firm acknowledges that the reduction in earnings per share (EPS) guidance is likely to exert downward pressure on Nike's share price in the near term. This adjustment reflects the immediate financial challenges Nike faces as it works to revitalize its product lineup and market approach.
Investors and market watchers will be closely monitoring Nike's upcoming product launches and marketing campaigns, as these efforts will be crucial in determining the company's trajectory following the revised half-year guidance and the transition in leadership.
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