Nike stock rating reiterated by Piper Sandler ahead of earnings report

Piper Sandler maintained its Overweight rating and $70.00 price target on Nike (NYSE:NKE) ahead of the company’s fourth-quarter fiscal 2025 earnings report scheduled for June 26. The stock, currently trading at $61.90, appears slightly undervalued according to InvestingPro analysis, which offers comprehensive insights including 10+ additional ProTips and a detailed Fair Value assessment in its Pro Research Report.

The research firm noted that short interest in Nike has increased more than 40% year-to-date as investors prepare for fiscal year 2026 to potentially be "another reset year." These concerns appear justified, as revenue declined 7.3% over the last twelve months, and analysts anticipate further sales decline this year. Concerns center around ongoing headwinds from the company’s Classics line and insufficient innovation to offset these challenges.

Piper Sandler’s analysis includes updated calculations for Nike’s Classics rationalization in fiscal year 2026 and projects approximately $500 million in incremental sales from new distribution and expansion efforts, which could help counterbalance some of the Classics-related difficulties. Despite current challenges, Nike maintains a healthy gross profit margin of 43.82%.

The firm observed encouraging progress in Nike’s discounting strategy on its website, with the number of sale SKUs down approximately 50% since December. Currently, sale items represent 31% of the product mix, a significant reduction from 51% in December.

For Nike’s stock performance going forward, Piper Sandler emphasized that investor focus will be on "the rate of change," with particular attention to the company’s China business, inventory levels, and long-term margin profile, including whether Nike can return to double-digit margins.

In other recent news, Nike is preparing to release its fourth-quarter earnings report, with Citi expecting the company to surpass earnings estimates due to stronger sales and reduced administrative expenses. However, UBS anticipates that Nike will only meet expectations for the quarter, citing a decline in global sales growth. Both UBS and Citi project that Nike may not provide full-year fiscal 2026 guidance due to ongoing macroeconomic challenges, with UBS forecasting earnings guidance below consensus estimates. Morgan Stanley (NYSE:MS) has lowered its price target for Nike, citing a longer-than-expected turnaround influenced by tariff and macroeconomic issues. Despite these concerns, Goldman Sachs has maintained a buy rating, expressing confidence in Nike’s strategic direction amid investor skepticism. Truist analysts have noted recent price increases on select Nike footwear, observing that these adjustments are now active in the market. They are monitoring the impact of these changes on sales trends. These developments highlight the mixed sentiment surrounding Nike’s financial outlook and strategic initiatives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.