Nike received an upgrade early Thursday from Truist, after a two-month rally highlighted the retailer's recovery path. Nike stock eased after the open Thursday. Shares ticked lower Thursday, after leading the Dow Jones Industrial Average in premarket trade.
Truist on Thursday said it has been cautious on the Dow Jones apparel leader since fall 2023, The Fly reported. The research organization said the company's turnaround process is still likely to be long and uncertain, but Truist is "more optimistic" as investor expectations now reflect that reality. Truist sees Nike as "moving in the right direction." If the team is able to score some near-term wins, that should "show investors there are better times ahead," the firm wrote.
Truist upgraded NKE stock to buy from hold and hiked its price target to 97 from 83. The target was about 18% above Wednesday's closing price.
The research note comes after Nike posted mixed fiscal Q1 2025 results on Oct. 1. Earnings cleared estimates by a strong margin, while sales came up short of forecasts. The Dow retailer saw double-digit declines in Nike Direct revenue and digital sales for the Nike brand. Meanwhile, softness in North America and China sales continued to persist.
Nike also withdrew its full-year 2025 guidance during its transition to a new CEO, and postponed its investor day presentation. The company on Sept. 19 appointed Elliott Hill, a 32-year veteran of the company, to return to serve as CEO and a board member starting Oct. 14. The board and current CEO John Donahoe decided Donahoe will retire from his role on Oct. 13, but remain as an advisor through Jan. 31.
In place of full-year guidance, Nike plans to release quarterly outlooks.
The company expects Q2 revenues will be down 8% to 10%.
Nike forecasts its men's and women's lifestyle, Jordan brand and Nike Digital businesses will all decline in double digits for fiscal 2025.
Nike Stock
NKE eased 0.4% Thursday. Shares swung 1.3% higher premarket Thursday, marking the largest gain among Dow Jones stocks. The stock rose 2.1% on Wednesday.
Nike has rallied 16% off an August low, and is managing to maintain support at its 50-day moving average. It is attempting to break out of a downtrend begun in December 2023.
Shares have fallen 24% this year.
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