BMO maintains Nike stock Outperform rating, $92 price target

On Friday, BMO Capital Markets reiterated its Outperform rating on Nike shares (NYSE:NKE), maintaining a price target of $92.00. The firm’s analysis followed a detailed review of Nike’s recent 10Q filing, which highlighted several regional performance issues and external factors affecting the company’s operations. The stock, currently trading near its 52-week low of $55.40, has declined over 31% in the past six months. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis.

The report from BMO Capital noted that North America’s gross margin (GM) showed a significant deceleration, marking the second consecutive quarter with higher reserves, a sign of increased product markdowns or inventory issues. In Greater China, the gross margin contracted for the fifth consecutive quarter, with reserves increased for the third straight period. This trend suggests ongoing challenges in one of Nike’s key markets. Additionally, the gross margin in the Europe, Middle East, and Africa (EMEA) region has turned negative. The company’s overall gross margin stands at 44%, while revenue has declined 7.3% over the last twelve months.

Despite these regional headwinds, BMO Capital’s stance on Nike’s stock remains positive. The analyst’s comments indicated a keen interest in providing detailed work on regional and segment performance for clients seeking deeper insights.

Furthermore, the report mentioned that Nike’s 10Q filing had limited references to tariffs. The company acknowledged the impact of various external factors, including but not limited to, geopolitical dynamics, new tariffs, tax regulation, and fluctuating foreign exchange rates, which create uncertainty and volatility in the operating environment.

Investors keeping an eye on Nike will note that BMO Capital’s analysis points to a complex landscape for the sportswear giant, with specific regional challenges and broader external pressures. Nevertheless, the firm’s reaffirmed Outperform rating and $92.00 price target indicate confidence in Nike’s ability to navigate through these issues.

In other recent news, Nike’s third-quarter fiscal year 2025 results exceeded initial expectations, partly due to a favorable shift in North American shipments. However, Stifel analysts maintain a Hold rating on Nike stock with a $75 price target, citing challenges such as excess inventory in North America and tariff pressures on goods sourced outside the United States. Jefferies analysts, on the other hand, have reiterated a Buy rating, setting a price target of $115, highlighting Nike’s strong market position and potential for earnings growth if sales rebound to around $50 billion. Meanwhile, Piper Sandler analysts maintain an Overweight rating with a $90 target, despite projecting significant declines in Nike’s Classics franchises, which are expected to create headwinds for overall sales.

BMO analysts remain positive on Nike, noting strong performance in the running category with new products like the Vomero 18 and Pegasus Premium. They also observed improvements in the Air Force 1 and Dunk franchises, with less promotional activity in March compared to previous months. The analysts at BMO view these developments as promising for Nike’s future. Despite the challenges, Nike’s leading market position and innovation efforts continue to garner confidence from various analyst firms. These recent developments provide investors with insights into Nike’s performance and the challenges it faces in the current market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.