On Friday, Goldman Sachs (NYSE:GS) made an adjustment to its outlook on Nike (NYSE:NKE) shares, reducing the price target to $120 from the previous $135 while still endorsing the stock with a Buy rating. The firm's analyst cited current challenges in the near-term growth trajectory for Nike as the primary reason for the adjustment, anticipating a potential underperformance compared to its peers in the market.
The analyst noted that the expectations for Nike's growth in fiscal year 2025 are now more conservative, leading to a revised earnings estimate. Despite the downward revision, Goldman Sachs maintains a positive long-term view on the company, suggesting that the current forecast could serve as a recalibration point for Nike.
The report highlighted several factors that could contribute to Nike's future earnings growth. These include the potential for the company to recover transient costs, a strengthening inventory situation within the industry, and an anticipated acceleration of innovation. These elements are expected to support stronger earnings for Nike moving forward.
Goldman Sachs reaffirmed its confidence in Nike's stock by maintaining a Buy rating but acknowledged that investors might seek tangible signs of innovation-driven growth before they are willing to assign a higher valuation to the shares. The new 12-month price target of $120 reflects a more cautious stance on the stock's short-term prospects while still signaling optimism for its long-term performance.
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