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Investing.com - Evercore ISI raised its price target on Nike (NYSE:NKE) to $90.00 from $75.00 on Friday, while maintaining an Outperform rating on the $92.31 billion athletic footwear and apparel company. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, with price targets ranging from $40 to $120.
The firm cited Nike’s fourth-quarter adjusted results, which significantly exceeded consensus expectations with revenue down only 12% year-over-year, compared to guidance of approximately 17% decline and Street expectations of a 15% drop. Operating income beat consensus by 82% despite marketing spend increasing 15% year-over-year in the quarter. The company maintains strong financial fundamentals, with InvestingPro analysis showing a healthy current ratio of 2.19 and sufficient cash flows to cover interest payments.
Nike confirmed that revenue growth and gross margin definitively bottomed in the fourth quarter and will improve sequentially going forward. The company also reported that Holiday orders have sequentially improved and are now positive year-over-year, even including a significant drag from China.
For the first quarter, Nike guided revenue to decline only in the mid-single digits, which Evercore believes sets a path for return to positive year-over-year revenue growth in the second half of fiscal 2026. Gross margins are expected to improve sequentially throughout the year as $1 billion of gross tariff headwinds diminish each quarter.
Evercore raised its fiscal 2026 earnings per share estimate to $1.55 from $1.50 and its fiscal 2027 estimate to $2.65 from $2.50, noting that Nike indicated there are no structural barriers to returning to double-digit operating income margins long-term.
In other recent news, Nike reported its fourth-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.14, compared to the forecast of $0.12, and revenue of $11.1 billion, exceeding the anticipated $10.7 billion. Despite these positive results, the company faced a 12% year-over-year revenue decline, with gross margins dropping by 440 basis points. Nike’s strategic initiatives, including new partnerships and distribution strategies, are expected to drive future growth. HSBC upgraded Nike’s stock rating to Buy, raising its price target to $80, citing evidence of a potential sales rebound. Conversely, KeyBanc maintained its Sector Weight rating, acknowledging progress in Nike’s strategic efforts but highlighting ongoing challenges. Telsey Advisory Group reiterated its Market Perform rating, noting structural profit headwinds during Nike’s transformation. Meanwhile, Citi raised its price target for Nike to $68, maintaining a Neutral rating, and highlighted that while direct-to-consumer sales are expected to remain weak, the company is seeing positive responses from wholesale customers.
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