Citi maintains Nike stock rating ahead of expected earnings beat

Citi has reiterated its Neutral rating and $57.00 price target on Nike (NYSE:NKE), currently trading at $61.90, ahead of the company’s fourth-quarter earnings report scheduled for June 26. According to InvestingPro analysis, Nike appears fairly valued at current levels, with the stock maintaining a P/E ratio of 20.44 despite experiencing a -33.45% price decline over the past year.

The investment firm expects Nike to beat fourth-quarter earnings estimates, driven by slightly stronger sales and lower selling, general and administrative expenses (SG&A). Citi does not anticipate management will issue fiscal year 2026 guidance due to macroeconomic uncertainty and Nike’s ongoing global brand turnaround efforts.

For the first quarter of fiscal 2026, Citi projects Nike will guide to high-single-digit to low-double-digit sales declines and earnings per share of approximately $0.10, significantly below the consensus estimate of $0.39. This forecast reflects weaker gross margins and higher SG&A expenses compared to consensus expectations, primarily due to continued pressure from classic franchise management.

Nike management is expected to indicate that headwinds from classic franchise management will begin to abate in the second half of fiscal 2026, with the company targeting clean inventory across its global marketplace. The timing of Nike achieving sufficient innovation at scale across performance and lifestyle categories to drive sustainable revenue growth remains uncertain.

Citi views the risk/reward profile for Nike shares as balanced heading into the fourth-quarter earnings report, noting that any signs the company could return to revenue growth in late fiscal 2026 would be positive for the stock given current negative sentiment.

In other recent news, Nike has been making headlines with several key developments. UBS maintained a Neutral rating on Nike, citing weakening global sales trends and projecting the company’s upcoming earnings to align with expectations. The firm anticipates Nike’s first-quarter earnings guidance to be below the broader analyst consensus, with potential earnings per share ranging from 11 to 27 cents. Meanwhile, Goldman Sachs reiterated its buy rating on Nike stock, despite investor skepticism, highlighting the company’s strategic efforts to revitalize growth amid various challenges. Truist analysts noted recent price hikes on select Nike footwear, including the Vomero 18 and Pegasus Premium, as part of the company’s strategy to adjust pricing in the current retail environment.

Additionally, Nike announced the appointment of Michael Gonda as the new Executive Vice President and Chief Communications Officer, effective July 2025. Gonda will be responsible for leading Nike’s global communications strategy. Truist Securities also maintained its buy rating on Nike, pointing to the strong performance of the company’s latest men’s running shoes, which have ranked among the top five in the market. Nike’s success at Dick’s Sporting Goods (NYSE:DKS) and the introduction of exclusive colorways at Fleet Feet have contributed to positive consumer responses. These developments reflect Nike’s ongoing efforts to strengthen its market position and navigate current challenges.

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