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Investing.com - Bernstein analyst Aneesha Sherman raised the price target on Nike (NYSE:NKE) to $90.00 from $85.00 on Monday, while maintaining an Outperform rating on the stock. The sports apparel giant, currently valued at $113.7 billion, trades at a P/E ratio of 35.6x. According to InvestingPro, Nike maintains a FAIR financial health score and has raised its dividend for 23 consecutive years.
The price target increase reflects potential upside from Nike’s Jordan brand, despite current challenges. Sherman notes that Jordan has lost approximately $2 billion in sales, shrinking from 15% of Nike’s total sales to an estimated 11% from fiscal years 2024 to 2026. As a prominent player in the Textiles, Apparel & Luxury Goods industry, Nike generated $46.3 billion in revenue over the last twelve months. InvestingPro subscribers can access 12 additional key insights about Nike’s market position and growth potential.
According to Bernstein’s analysis, the earliest Nike could bring a compelling Jordan product to scale would be in the second half of calendar year 2026, corresponding to Nike’s fiscal year 2027.
In a bull scenario outlined by the firm, a strong Jordan launch in Summer 2026 could initiate a multi-year brand cycle, potentially driving high-single-digit percentage growth for Nike with margins exceeding 13%. This scenario could lead to fiscal year 2029 earnings per share reaching $4.80, implying a current stock value of $120, representing 56% upside.
Conversely, Bernstein warns that without successful Jordan brand revitalization, Nike’s total growth might only reach mid-single-digit percentages, with margins struggling to exceed low double digits by fiscal year 2029, resulting in earnings per share around $3.60 and implying a current stock price of $70, or 9% downside.
In other recent news, Nike, Inc. announced a correction in its annual report, revealing that its product purchase obligations were overstated. The company clarified that as of May 31, 2025, these obligations amounted to approximately $5 billion, all due within the next 12 months. Meanwhile, Stifel has reaffirmed its Hold rating on Nike stock, highlighting inventory challenges in Greater China and North America. Nike is also making leadership changes at its Converse subsidiary, appointing Aaron Cain as the new CEO to address declining sales. Additionally, Nike faces potential margin pressure due to a new US-Vietnam trade agreement that raises tariffs on Vietnamese imports to 20%. The agreement also includes a 40% tariff on trans-shipped goods to prevent routing through Vietnam to evade higher tariffs. Despite these challenges, Nike’s stock saw a rise after a trade deal with Vietnam was announced, promising the U.S. "total access" to Vietnamese markets without tariffs on American products.
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