Stifel maintains Hold on Nike stock, price target at $75

On Friday, Stifel analysts maintained their Hold rating on Nike (NYSE:NKE) shares, with a consistent price target of $75.00. The firm’s analysis followed the release of Nike’s third-quarter fiscal year 2025 (February) 10-Q report, which was filed after the market closed on Thursday, April 3, 2025. This report offered additional details beyond Nike’s earnings announcement on March 20, 2025. The stock, currently trading near its 52-week low of $55.40, has experienced a significant decline of 31.7% over the past six months. According to InvestingPro analysis, Nike appears slightly undervalued at current levels.

The third-quarter results were noted to be better than initially feared, partly due to a beneficial shift in North American shipments. However, the outlook for the fourth quarter of fiscal year 2025 is more challenging than anticipated, with InvestingPro data showing 19 analysts revising their earnings downward for the upcoming period. Stifel has previously pointed out that reciprocal tariffs are creating significant cost pressures for goods sourced outside the United States. Although the 10-Q filing did not provide a substantial update regarding the tariff situation, several key points were highlighted.

Firstly, there is an excess inventory issue in North America that Nike needs to address. Secondly, the analysts observed a reduction in the average selling price (ASP) headwind, particularly in the footwear segment. Lastly, there is an indication of improving inventory alignment outside of North America, which could be beneficial for the company moving forward. Despite these challenges, Nike maintains strong financial fundamentals with a current ratio of 2.19 and liquid assets exceeding short-term obligations.

Despite these observations, Stifel remains cautious about Nike’s stock, citing the ongoing tariff risks that could impact the company’s profitability. The analysts underscored that while Nike’s leading market position is a significant competitive advantage, the current tariff-threatened environment presents a challenging backdrop for the company as it navigates a marketplace cleanup and reset. With a gross profit margin of 44% and strong cash flows sufficient to cover interest payments, Nike maintains its position as a prominent player in the Textiles, Apparel & Luxury Goods industry. For deeper insights into Nike’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Nike reported its third-quarter fiscal 2025 financial results, revealing better-than-expected performance due to favorable North American shipments. However, challenges remain, particularly with reciprocal tariffs impacting costs. Stifel analysts maintained a Hold rating with a $75 target, noting the excess inventory in North America and potential risks to profits. Meanwhile, BMO analysts remain positive on Nike, highlighting the success of new running products and slight improvements in the Air Force 1 and Dunk franchises. Jefferies analysts upheld a Buy rating with a $115 target, expressing confidence in Nike’s brand strength and growth potential, despite a dip in operating margins. Piper Sandler reiterated an Overweight rating with a $90 target, projecting significant declines in Nike’s Classics franchises, yet maintaining a cautiously optimistic outlook due to management’s innovation efforts. DA Davidson also maintained a Buy rating with a $273 target, emphasizing Nike’s better-than-expected North American performance and its positive impact on partners like Dick’s Sporting Goods (NYSE:DKS). These developments reflect a mix of challenges and opportunities for Nike as it navigates current market conditions.

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