Morgan Stanley raises Nike stock price target to $64 on bottoming fundamentals

Investing.com - Morgan Stanley (NYSE:MS) raised its price target on Nike (NYSE:NKE) to $64.00 from $61.00 on Friday, while maintaining an Equalweight rating on the sportswear giant’s shares. The new target aligns closely with InvestingPro’s Fair Value calculation, which suggests Nike is currently fairly valued. The stock, with a market capitalization of $92.31 billion, trades at a P/E ratio of 20.66.

The investment firm cited sales-driven upside in Nike’s fourth quarter, suggesting the company’s fundamentals may be bottoming out after a challenging period. Morgan Stanley noted that first-quarter and full-year expectations likely reflect "low bars," which represents a welcome change compared to management’s track record over the last two years. InvestingPro data shows revenue declined 7.3% in the last twelve months, though 8 analysts have recently revised their earnings expectations upward.

While Morgan Stanley expects positive rate of change for Nike going forward, the firm expressed continued uncertainty around the company’s long-term growth and margin profile, which factored into its decision to maintain the Equalweight rating despite the price target increase.

The sportswear company has faced headwinds in recent quarters as it navigates changing consumer preferences and increased competition in the athletic footwear and apparel markets.

The price target adjustment comes as Nike works to revitalize its product lineup and marketing strategies to regain momentum in key markets globally.

In other recent news, Nike’s fourth-quarter results have been a focal point for analysts and investors. Evercore ISI raised its price target for Nike to $90, noting that the company’s adjusted results exceeded expectations, with revenue down only 12% year-over-year, which was better than anticipated. The company also indicated that revenue growth and gross margins had bottomed in the fourth quarter, with sequential improvements expected. Jefferies maintained a Buy rating on Nike, highlighting the company’s strategic efforts to clean up excess inventory and strengthen wholesale relationships, including re-establishing ties with Amazon (NASDAQ:AMZN).

KeyBanc acknowledged Nike’s progress with its "Win Now" initiatives, observing that the company’s inventory is on track to be in a clean position by mid-fiscal 2026. However, they maintained a Sector Weight rating due to ongoing challenges, particularly in digital sales and classic products. Telsey Advisory Group reiterated a Market Perform rating, noting that while Nike is taking steps to address its excess inventory and rebalance its product portfolio, the brand is still several quarters away from stabilization.

Citi raised its price target for Nike to $68, citing improved fourth-quarter sales results and a positive response from wholesale customers to new products. Despite these developments, Citi maintained a Neutral rating, highlighting concerns over direct-to-consumer sales and limited visibility into customer responses. These recent developments suggest that Nike is navigating a challenging landscape with strategic adjustments and cautious optimism from analysts.

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