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With a market cap of $113.8 billion, NIKE, Inc. (NKE) is a leading global designer, marketer, and distributor of athletic footwear, apparel, and equipment. Based in Beaverton, Oregon, it operates in the sports and lifestyle sector, leveraging iconic brands like NIKE, Jordan, and Converse to cater to diverse markets worldwide.
Shares of the athletic apparel maker have significantly underperformed the broader market over the past 52 weeks. NKE has dipped 30.6% over this time frame, while the broader S&P 500 Index ($SPX) has gained 36.4%. In 2024, shares of NKE are down 30.1%, compared to SPX’s 25.2% increase on a YTD basis.
Narrowing the focus, NKE has also lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 30.8% rise over the past 52 weeks and 18.6% return on a YTD basis.
Nike stock tumbled 6.8% on Oct. 2 due to mixed Q1 2025 results, with revenue falling 10% year-over-year to $11.6 billion, missing expectations, along with a 26% year-over-year drop in EPS to $0.70 despite beating estimates. Revenue declines were driven by higher-than-expected traffic drops in NIKE Direct, particularly in Greater China, and lower-than-planned retail and wholesale sales amid increased promotional activity. The company also withdrew its full-year guidance, adding to investor uncertainty, and postponed its Investor Day to allow new CEO Elliott Hill time to assess strategic plans. Additionally, weak outlook statements for Q2, with expected revenue declines of 8% - 10% and anticipated margin pressures, fueled further concerns about near-term performance.
For the current fiscal year, ending in May 2025, analysts expect NKE’s EPS to decline 30.6% year-over-year to $2.74. However, the company’s earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 31 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, 15 “Holds,” and two “Strong Sells.”
On Nov. 7, RBC Capital's Piral Dadhania lowered NIKE's price target to $80 and maintained a “Sector Perform" rating, citing a balanced investment outlook with needed organizational improvements and potential upside from modest FY26 consensus estimates.
The mean price target of $88.25 represents a premium of 16.2% to NKE’s current levels. The Street-high price target of $120, implies a potential upside of 58.1% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
