«The worst is over»: analysts raised ratings and targeting for Nike stock after the report

Nike's quarterly report was better than Wall Street expected: analysts had expected «painful» results, but the drop in revenue was less than forecast, which helped inspire confidence in the market. Against this backdrop, several analysts, including HSBC, raised their ratings and target price for Nike shares, which were up 18% at the moment in Friday's trading.

HSBC analyst Erwan Rambur raised his rating on Nike shares from Hold (advice to hold) to Buy after the company's unexpectedly strong fiscal fourth-quarter results. The bank gave a Buy recommendation on Nike s securities for the first time in three and a half years, CNBC noted. Rambur also increased his target price on the stock from $60 to $80, up 28% from the closing price on Thursday, June 26.

In a report for the fourth quarter of fiscal 2025 ended May 31, Nike said sales fell nearly 12% - to $11.1 billion. Analysts polled by LSEG expected $10.72 billion. Net income per share was $0.14 versus Wall Street's forecast of $0.13. Also in the report, the company said it will lose $1 billion due to Donald Trump's imposition of 30% duties on imports from China. Asia is where most of Nike's manufacturing sites are located. For the current quarter, Nike expects revenue to decline by a mid-single-digit percentage (about 4-7%) and gross margin to decline 350-425 basis points, including a 100-point decline due to duties.

«This moment has been a long time coming, but we believe the tipping point has finally arrived,» Rambur wrote in a note that is cited by CNBC. -  We see more than compelling evidence that Nike is on track to rebound in sales for the foreseeable future and to rebuild margins - despite unfavorable duty pressures.»

The analyst also noted the expected improvement in sales dynamics, reduced pressure on gross margin in the second half of the year and management's commitment to quality rather than quick fixes. He draws attention to Nike's strategy to relaunch online sales with «full» prices (no discounts), which could support earnings in the long term.

However, Rambur cautioned against excessive optimism about the pace of recovery. He noted that we should not expect a V-shaped dynamics with a sharp rise after the recession: rather it will be a curve similar to the Nike logo, the analyst suggested. The sell-off, weak sales in China and the impact of duties will make the current quarter (ending in August) challenging: both sales and margins will decline. The impact of duties, according to HSBC, will be gradually mitigated by offsetting measures.

- JPMorgan raised its target price on Nike shares to $64 from $56, maintaining its neutral rating. The bank said the company's outlook reflects a rebound in demand of about 1 percentage point from the fourth quarter, writes Investor's Business Daily.

- Bank of America considers that «the worst is over»: it expects sequential improvement in sales with a return to growth in the second half of fiscal 2026. Although the bank lowered its 2026 earnings forecast by $0.2, to $1.6 per share, it raised its target price on Nike securities to $84 (assuming a 34% increase from the closing price on June 26), maintaining a buy recommendation on the stock. 

- Jefferies also reiterated advice to buy Nike stock with a $115 price target despite «difficult but predictable» fourth-quarter results, wrote Investing.com. The investment bank applauded CEO Elliott Hill's «decisive» actions to eliminate excess inventory. Jefferies also emphasized changes in Nike's wholesale strategy, with the company renewing its partnership with Amazon and improving relationships with other distributors. Analysts at the bank expect the improved assortment to boost orders and sales in the coming quarters, which will produce strong reported numbers as they will be compared to the low base of fiscal 2025.

- Bernstein reiterated an Outperform rating on Nike stock with a $85 target price. Analysts note Nike's success in clearing out warehouses and growing orders. They believe these are key signals that «the worst phase of the transformation is behind us», quotes a note from investment bank Investing.com.

Nevertheless, analysts emphasize that «the Nike story is not yet fully evident»: in particular, questions remain about the recovery of the Lifestyle and Jordan sub-brand segments, where positive trends have not yet been confirmed. According to Bernstein, the company will see significant revenue growth in the first half of fiscal 2026. A «slow but steady uptrend» in the stock is expected as positive signals accumulate, Bernstein notes. By fiscal 2027, the bank believes Nike will reach earnings of $2.9 per share and a margin of 10%, underpinning sustainable medium-term growth.

In total, according to data from MarketWatch, 42 analysts are tracking Nike stock. Their opinions are split, with 20 recommending buying the stock, 20 recommending holding it in a portfolio, and only two advising selling. The Wall Street consensus price target after the ratings reassessment is $72.9 per Nike share, up 17% from the closing price on June 26. Nike shares jumped 18% to $74.2 in trading on June 27, their highest price since mid-March.

This article was AI-translated and verified by a human editor