Product Portfolio Transition And Digital Cleanup Will Create New Opportunities

Analysts have modestly raised their price target for NIKE to $79.76, reflecting improved sales and margin prospects—especially from cleaner U.S. channels, strong demand for key franchises, and better inventory management—though ongoing China, tariff, and macro risks temper the near-term outlook.

Analyst Commentary

• Bullish analysts highlight improving sales and margins, citing accelerated inventory normalization, cleaner U.S. channels, rising holiday order books, and renewed retailer enthusiasm, particularly for Air Force One and Jordan Retro.
• Several firms point to increasing evidence of a sales rebound and margin recovery in the second half of the fiscal year, supported by improved product placement at key retailers, expansion in Amazon partnership, and positive secondary sneaker market trends.
• Tariff headwinds and concerns over China brand momentum remain key risks, leading some bearish analysts to adopt a cautious near-term outlook, trim earnings forecasts, and maintain neutral or hold ratings despite acknowledging operational improvements.
• Management's reluctance to provide fiscal 2026 guidance and multiple “unknowns” (notably tariffs, consumer response to price increases, and macro volatility) are cited as reasons for some analysts lowering price targets or expressing guarded optimism.
• Margins are expected to be gradually “repaired” as new management implements turnaround plans focused on innovation and quality, but some analysts remain cautious about the pace of demand improvement and underlying fundamentals in the near term.

What's in the News

• Nike is implementing another round of job cuts impacting less than 1% of corporate staff as part of CEO Elliott Hill’s business overhaul, excluding EMEA and Converse units (CNBC).
• The restructuring aims to better align the company with its core sports focus and deepen connections with consumers, signaling a strategic realignment (CNBC).
• Nike has appointed Aaron Cain, previously VP and GM of Nike’s global men’s business, as the new CEO of Converse, replacing Jared Carver (Bloomberg).
• The CEO change at Converse follows ongoing sales challenges for the brand, as Nike seeks to reverse a persistent sales slump (Bloomberg).
• Nike shares rose 1.4% following the announcement of the new Converse CEO appointment (Bloomberg).

Valuation Changes

Summary of Valuation Changes for NIKE

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $78.91 to $79.76.
• The Future P/E for NIKE has risen slightly from 33.31x to 34.89x.
• The Net Profit Margin for NIKE has fallen slightly from 8.62% to 8.32%.