Nike price target raised to $68 from $57 at Citi on improved outlook

Investing.com - Citi raised its price target on Nike (NYSE:NKE) to $68.00 from $57.00 on Thursday, while maintaining a Neutral rating on the sportswear giant’s stock. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward for the upcoming period, though the stock currently trades slightly below its Fair Value.

The firm cited Nike’s fourth-quarter sales results, which exceeded consensus expectations, though gross margins were slightly weaker than anticipated. Management guided for first-quarter reported sales to decline by mid-single digits, including a 100 basis point foreign exchange tailwind, which Citi noted was better than market fears. This aligns with InvestingPro’s data showing a 7.3% revenue decline over the last twelve months, with the company maintaining a healthy gross profit margin of 43.8%.

Nike indicated that holiday orderbooks are up, with wholesale customers responding positively to the company’s new products and innovation efforts. The improved orderbook includes some unquantified amount of sell-in from new distribution channels and programs with Amazon (NASDAQ:AMZN), Academy Sports, and Famous Footwear.

Citi highlighted that direct-to-consumer sales are expected to remain weak during the holiday season and throughout fiscal 2026. However, the firm believes the worst of the headwinds from Nike’s classic franchise are now behind the company.

Despite the improved outlook, Citi maintained its Neutral stance, noting that Nike shares were trading at a fiscal 2026 enterprise value to EBITDA multiple of 28x in pre-market trading, with limited visibility into ultimate customer response to the company’s products.

In other recent news, Nike reported its fourth-quarter 2025 earnings, exceeding market expectations with an earnings per share (EPS) of $0.14 against a forecast of $0.12, and revenue of $11.1 billion surpassing the predicted $10.7 billion. Despite a 12% year-over-year revenue decline, Nike’s strategic initiatives and product innovations showed promise for future growth. The company faced pressure on gross margins, which fell by 440 basis points. Additionally, HSBC upgraded Nike’s stock rating from Hold to Buy, citing evidence of a path to sales recovery and a positive repositioning of Nike’s digital channel. Analysts at HSBC believe Nike’s inventory cleanup will be completed in the next two quarters, which could stabilize its assortment. CEO Elliot Hill emphasized Nike’s commitment to quality and growth, despite challenges such as tariff impacts and geopolitical volatility. Nike’s future outlook includes anticipated revenue declines in the first quarter of fiscal year 2026, but the company aims to return to sustainable growth and improve operating margins.

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