RBC Capital cuts Nike stock price target to $65 from $66

On Tuesday, RBC Capital Markets adjusted its outlook on Nike shares (NYSE:NKE), reducing the price target from $66.00 to $65.00 while maintaining a Sector Perform rating. The stock, currently trading at $62.61, has declined significantly over the past three months according to InvestingPro data. The firm’s analysts cited ongoing efforts by the athletic apparel giant to manage excess inventory and prepare for the upcoming Autumn/Winter 2025 Running product launch as reasons for the adjustment.

According to RBC Capital, Nike is currently in a "heavy lifting stage" of inventory clean-up, which is a critical phase for the company. Despite these challenges, InvestingPro analysis shows Nike maintains strong financial health with a current ratio of 2.19, indicating sufficient liquidity to meet short-term obligations. The recent changes in Nike’s Senior Leadership Team (SLT) were noted as indicative of progress in establishing a more effective executive governance framework.

The analysts expressed caution regarding the risk/reward profile for Nike heading into the fiscal year 2025 earnings results. Concerns were raised over potential impacts from clearance activities, tariff risks, and uncertain macroeconomic conditions. RBC Capital suggests that it is too early to adopt a more constructive stance on the stock until the company’s marketplace inventories are cleaner and revenue growth shows signs of improvement, which is anticipated to be more likely in the second half of fiscal year 2026.

In light of these considerations, RBC Capital has also revised downward its earnings per share (EPS) estimate for Nike for fiscal year 2026 by 8%. The Sector Perform rating reflects a neutral stance on the stock, with the revised price target of $65.00 representing a modest decrease from the previous target.

In other recent news, Nike Inc. has announced a reorganization of its leadership team, aligning with its strategic "Win Now" plan. Amy Montagne has been promoted to President of Nike, while Phil McCartney and Nicole Graham have taken on the roles of EVP, Chief Innovation, Design & Product Officer, and EVP, Chief Marketing Officer, respectively. This reshuffle follows the retirement announcement of Heidi O’Neill, who will remain as an advisor until September 2025. Analysts from Stifel have maintained a Hold rating on Nike stock with a $64 price target, acknowledging the leadership changes and their alignment with Nike’s strategic goals. Meanwhile, Telsey Advisory Group has adjusted its price target for Nike shares to $70, down from $80, maintaining a Market Perform rating. The company is also facing challenges from tariffs, as highlighted by a footwear trade association’s plea to the administration for tariff exemptions. These tariffs have been a concern for Nike and other major footwear companies, potentially impacting costs for American consumers. Additionally, Nike is reducing its technology division, shifting some work to third-party vendors, as part of CEO Elliott Hill’s ongoing organizational changes.

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