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Friday - Baird analysts have revised the price target for Nike (NYSE:NKE) shares, lowering it from $105.00 to $99.00 while still maintaining an Outperform rating. Currently trading at $71.86, near its 52-week low of $68.62, Nike’s stock has seen a 27% decline over the past year. The adjustment follows Nike’s fiscal third-quarter earnings report, which surpassed expectations primarily due to reduced overhead costs. According to InvestingPro analysis, Nike’s current valuation is near its Fair Value, with 12 additional ProTips available for subscribers. However, the company experienced weaker sales in January and February, with double-digit declines and less discounting activity, particularly in Greater China.
The analysts noted that despite the soft sales performance, Nike’s outlook for the second half of the fiscal year 2025 remains largely unchanged, suggesting a potentially lower fourth fiscal quarter. Nike has also indicated financial challenges in the first half of 2026 due to strategic efforts to shift towards a premium pull-market model.
In light of these developments, Baird analysts have taken a more conservative approach to their forecasts for the first and second quarters of the fiscal year 2026. Nonetheless, they believe that the fourth quarter of 2025 could represent the low point for the company’s recent performance.
The report highlighted Nike’s ongoing product and marketing initiatives, which are seen as encouraging signs for the company’s broader recovery. These efforts are expected to bolster Nike’s position in the market over the next 6 to 12 months or more, supporting the analysts’ positive outlook. Despite the near-term headwinds, the firm’s analysts are optimistic about Nike’s recovery potential and the company’s ability to navigate through the current market challenges.
In other recent news, Nike reported its third-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.54, compared to a forecast of $0.30. The company’s revenue for the quarter reached $11.3 billion, surpassing the anticipated $11.02 billion, but reflecting a 9% year-over-year decline. Despite the earnings beat, Nike faces challenges with declining revenues in key markets, particularly China, and a significant drop in gross margins. Analysts from Needham have lowered Nike’s stock price target to $75, maintaining a Buy rating, while Stifel also kept its $75 target with a Hold rating, acknowledging the company’s strategic efforts amidst challenges. Citi analysts maintained a Neutral stance on Nike shares with a $72 price target, noting weaker-than-expected gross margins despite stronger sales. Morgan Stanley (NYSE:MS) reduced Nike’s stock price target to $70, highlighting ongoing fundamental challenges and a high valuation compared to historical averages. Looking forward, Nike’s management has projected a mid-teens revenue decline for the fourth quarter, with gross margins expected to drop by 400 to 500 basis points, as the company continues to navigate through its business challenges.
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