Nike Rallies On Results, But Wall Street Still Sees A Long Turnaround

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Shares of Nike Inc (NYSE: NKE) climbed in early trading on Wednesday, after the company Tuesday reported its fiscal fourth-quarter results.

Here are some key analyst takeaways:

  • BofA Securities analyst Lorraine Hutchinson maintained a Neutral rating and slashed the price target from $55 to $47.
  • Guggenheim Securities analyst Simeon Siegel reiterated a Buy rating, while cutting the price target from $74 to $60.
  • BTIG analyst Robert Drbul maintained a Buy rating and price target of $55.
  • JPMorgan analyst Matthew Boss reaffirmed a Neutral rating and price target of $47.
  • Needham analyst Tom Nikic reiterated a Hold rating on the stock.
BofA Securities: Nike reported its quarterly results broadly in-line with expectations. And sales declined by 4% in constant currency terms. Tariff refunds of 52 cents per share boosted the company's earnings of 72 cents per share.

Sales in China remained under pressure and management lowered their sales guidance. "We maintain our F27E EPS of $1.60 as lower sales are offset by cost control and stronger GM," Hutchinson wrote.

The price target has been reduced to reflect slower-than-expected progress in Nike's sales turnaround, she added.

Guggenheim Securities: Even after excluding the tariff refunds, Nike reported an earnings beat. Siegal credited the growth to "better-than-expected margins and sales across most geographies." Still, the apparel maker experienced a broad-based slowdown in sales in mid-April.

Management lowered their near-term sales outlook but projected gross margin expansion in the first quarter of fiscal 2027, versus their prior projection of the second quarter, the analyst stated. "Nike is clearly not yet out of the woods (China, EMEA, Converse etc. remain questions) but we have always believed that quality of sales inflects before actual sales, and earlier-than-expected GM expansion may prove a critical leading indicator of business stabilization," he further wrote.

BTIG: Nike made "meaningful progress" during fiscal 2026 by rebalancing its product portfolio, driving growth in performance categories, and reducing footwear franchises, Drbul said. While the environment remains volatile and Nike's sales recovery is taking longer, the company is executing well to improve its margins and cash flow from operations, he added.

The analyst noted Nike's steps to:

  • Tightly manage expenses
  • Reallocate resources to grow retail
  • Deepen consumer connections
  • Implement structural changes to improve efficiency across the supply chain
JPMorgan: After removing tariff refunds of 52 cents per share, Nike's underlying earnings of 20 cents per share were still higher than Street expectations of 14 cents per share, Boss said. The company's revenues declined by 1.1%, which was better than the consensus of a 2.2% decline, he added.

While Nike's underlying gross margins contracted by 11 basis points (bps) to 40.2%, this too was slightly better than Street's 40.1% projection, the analyst noted. However, management indicated that the operating environment had become increasingly challenging throughout the quarter, with a deceleration in retail sales trends, even in North America, by mid-April, he further stated.

Needham: Nike saw mixed demand trends, with sales growth in North America and declines in international sales, Nikic said. Growth in North America was once again driven by the wholesale business. However, China sales "worsened meaningfully" and declined by 17%, he added.

Nike reported gross margin expansion of 890 basis points (bps) for the fourth quarter, but excluding the benefit from tariff refunds, gross margin contracted by 10bps, although this was better than the guidance of down 25-75bps, the analyst stated. "The operating environment remains challenging and the trajectory of the turnaround remains unclear," he further wrote.

NKE Price Action: Shares of Nike had risen by 3.48% to $42.48 at the time of publication on Wednesday.