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On Friday, Stifel analysts maintained a Hold rating on Nike Inc (NYSE:NKE) shares with a steady price target of $75.00. The analysts highlighted that Nike’s recent financial results surpassed Stifel’s expectations, with revenues reaching $11,269 million, a decrease of 9% year-over-year but still ahead of the projected $10,924 million. Earnings per share (EPS) also exceeded estimates at $0.54, compared to the anticipated $0.22. According to InvestingPro data, Nike’s stock is currently trading near its 52-week low of $68.62, while maintaining strong fundamentals with a gross profit margin of 44.7%.
The performance was attributed to a favorable shift in North American shipments. Despite these better-than-expected third-quarter results, Nike’s outlook for the second half of fiscal year 2025 remains unchanged. The fourth quarter is expected to see revenue declines at a mid-teen percentage rate year-over-year and gross margin decreases that are deeper than previously forecasted. InvestingPro analysis reveals that Nike has maintained dividend payments for 42 consecutive years and raised them for 23 straight years, demonstrating financial resilience despite current challenges.
Stifel’s commentary noted that while Nike’s strategic efforts to clean up the marketplace are progressing as planned, a return to robust growth is anticipated to take several quarters. This period is necessary before the company sees a positive inflection in revenue and can leverage selling, general, and administrative expenses (SG&A) effectively. The analysts also mentioned that the market in Greater China continues to pose challenges for Nike.
Despite these concerns, Stifel acknowledges Nike’s leading market position and the strength of its performance-oriented products as reasons for optimism. However, given that Nike is still in the process of executing a large-scale marketplace cleanup, Stifel does not see a risk-adjusted case for upside from the current stock levels. The $75 price target set by Stifel is based on a 26 times price-to-earnings (P/E) ratio on their fiscal year 2027 EPS estimate of $2.88. InvestingPro analysis suggests Nike is slightly undervalued at current levels, with additional metrics and 12 more exclusive ProTips available to subscribers. Get access to the comprehensive Pro Research Report covering Nike’s complete financial health score, fair value analysis, and expert insights.
In other recent news, Nike’s fiscal third-quarter earnings report revealed an earnings per share (EPS) of $0.54, surpassing several analysts’ expectations. Despite this, revenue declined by 9% year-over-year to $11,269 million, indicating ongoing challenges. Analysts from Baird, Needham, Citi, Stifel, and Morgan Stanley (NYSE:MS) have all adjusted their price targets for Nike, reflecting varied perspectives on the company’s outlook. Baird lowered its target to $99 while maintaining an Outperform rating, citing weaker sales but a positive long-term outlook. Needham reduced its target to $75, maintaining a Buy rating, highlighting challenges in Nike’s "Win Now" strategy. Citi kept a Neutral stance with a $72 target, noting a weaker-than-expected gross margin. Stifel maintained a Hold rating with a $75 target, pointing to ongoing market challenges, especially in Greater China. Lastly, Morgan Stanley cut its price target to $70, expressing concerns about Nike’s high valuation and potential long-term challenges. These developments underscore the mixed analyst sentiment surrounding Nike’s financial performance and strategic direction.
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