Nike price target raised to $63 from $56 at UBS on inventory improvement

Investing.com - UBS raised its price target on Nike (NYSE:NKE) to $63.00 from $56.00 on Monday while maintaining a Neutral rating on the athletic footwear and apparel maker’s stock. The $92.31 billion company currently trades at $62.54, with InvestingPro analysis suggesting slight undervaluation based on Fair Value metrics.

The price target increase follows Nike’s fourth-quarter report, which showed the company’s inventory levels are improving and sales growth outlook is stronger than UBS had anticipated, prompting the firm to raise its earnings per share estimates. This aligns with InvestingPro data showing 8 analysts revising their earnings estimates upward, despite an expected 7.3% revenue decline.

Despite the price target increase, UBS maintained its Neutral rating on Nike stock, citing three key concerns about the company’s near-term prospects.

UBS expressed skepticism about whether Nike’s fundamentals would continue to show improvement over the next twelve months and highlighted significant tariff risk, noting that Nike could experience a 150 basis point negative impact to gross margin percentage if U.S. tariff rates on Vietnam increase to 25% from 10%.

The firm also cautioned that much of the positive news from Nike’s fourth-quarter report would likely be quickly priced into the stock, limiting potential upside from current levels.

In other recent news, Nike reported a decline in fourth-quarter fiscal 2025 earnings, with earnings per share at $0.14, slightly surpassing the market consensus of $0.13. Revenue fell by 11% on a constant currency basis, which was less severe than previously anticipated. Needham responded by raising its price target for Nike to $78.00, maintaining a Buy rating, and revising its earnings per share estimates upward for fiscal years 2026 and 2027. Meanwhile, Stifel kept its Hold rating and $64.00 price target, noting the steep revenue decline but acknowledging that results exceeded expectations by $400 million in revenue and $0.02 in earnings per share.

Williams Trading reiterated a Buy rating with a $73.00 price target, citing positive trends in wholesale channels despite challenges in direct-to-consumer sales. Morgan Stanley (NYSE:MS) also raised its price target to $64.00, maintaining an Equalweight rating and highlighting potential bottoming fundamentals. Jefferies maintained a Buy rating with a $115.00 price target, emphasizing the company’s inventory cleanup efforts and improvements in wholesale relationships. These developments reflect a mixed outlook for Nike, with analysts expressing varying levels of optimism about the company’s recovery and future growth.

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