Jefferies reiterates Nike stock buy rating amid inventory cleanup

Investing.com - Jefferies maintained its Buy rating and $115.00 price target on Nike (NYSE:NKE) stock Thursday, despite acknowledging the sportswear giant’s challenging fourth-quarter results. According to InvestingPro data, Nike currently trades at $62.54, with analysts’ targets ranging from $40 to $120, reflecting mixed sentiment amid expected sales decline this year.

The research firm described Nike’s fourth-quarter performance as "rough, but anticipated," while highlighting CEO Elliott Hill’s urgent actions to address excess inventory in lifestyle products. Jefferies noted early positive indicators in Nike’s running product category. Despite current challenges, Nike maintains strong financial health with a current ratio of 2.19, indicating ample liquidity to manage inventory levels.

Nike’s wholesale strategy adjustments were emphasized in the research note, with Jefferies pointing to the re-establishment of the Amazon (NASDAQ:AMZN) partnership and improvements in other wholesale relationships as significant developments.

Jefferies projected improved product offerings would lead to better orders and sell-through in coming quarters, with margin improvements and sales growth expected as the company faces "absurdly easy" comparative periods.

The firm noted Nike’s market capitalization has reached 10-year lows, while its enterprise value to sales ratio approaches 15-year lows, concluding its investment thesis with the phrase "Just BUY It!"

In other recent news, Nike’s fourth-quarter results have caught the attention of several analysts, leading to adjustments in stock ratings and price targets. Evercore ISI raised its price target for Nike to $90, citing the company’s adjusted results that surpassed expectations, with revenue declining less than anticipated and operating income exceeding consensus by a significant margin. The firm noted improvements in Nike’s holiday orders and projected a path to positive revenue growth later in fiscal 2026. Meanwhile, KeyBanc maintained its Sector Weight rating on Nike, acknowledging progress in the company’s strategic initiatives but highlighting ongoing challenges, particularly in digital sales and product transitions.

Telsey Advisory Group reiterated its Market Perform rating and a $70 price target, noting Nike’s efforts to manage inventory and strengthen wholesale relationships, though it remains cautious about the timeline for stabilization. Citi raised its price target to $68, recognizing better-than-feared sales projections and positive responses from wholesale customers, but maintained a Neutral stance due to uncertainties in customer reactions. HSBC upgraded Nike to a Buy rating, increasing its price target to $80, as it sees evidence of a sales recovery and praised the company’s strategic repositioning under new management. These developments reflect a mixed but cautiously optimistic outlook from analysts regarding Nike’s ongoing transformation and future prospects.

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