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Investing.com - Stifel maintained its Hold rating and $64.00 price target on Nike (NYSE:NKE) stock following the company’s fourth-quarter fiscal 2025 results, which showed the steepest revenue decline since implementing its Win-Now strategy. According to InvestingPro data, Nike’s current market capitalization stands at $92.31 billion, with the stock trading at a P/E ratio of 20.66.
Nike reported an 11% year-over-year currency-neutral revenue decline in the quarter, though results exceeded Street expectations by $400 million in revenue and $0.02 in earnings per share, according to Stifel’s analysis. InvestingPro analysis shows that Nike maintains a GOOD overall financial health score despite the revenue challenges, with robust liquidity as current assets exceed short-term obligations.
The sportswear giant continues to face headwinds from its classics product cleanup, which Stifel expects will remain a drag through the first half of fiscal 2026, with management not committing to a timeline for returning to top-line growth or margin expansion in the upcoming fiscal year. Based on InvestingPro’s Fair Value analysis, Nike appears slightly undervalued at current levels, though investors should note that analysts anticipate continued sales decline in the current year. For deeper insights, InvestingPro offers 12 additional tips and comprehensive analysis in its Pro Research Report.
Stifel estimates Nike will face a $1.6 billion revenue headwind in fiscal 2026 from classics challenges, requiring mid-single-digit percentage growth in the rest of the business just to achieve flat overall revenue performance.
The research firm noted some positive indicators, including wholesale order book growth for the holiday season and running category growth reportedly in the high single digits, but remains cautious due to execution risks and the impact of tariffs, which Nike expects will cost $1 billion before mitigation efforts and reduce fiscal 2026 gross margin by 75 basis points after mitigation.
In other recent news, Nike’s fourth-quarter financial results have garnered significant attention from analysts. Evercore ISI raised its price target for Nike to $90, citing better-than-expected adjusted results, with revenue declining by only 12% year-over-year, outperforming the anticipated 17% drop. The firm noted that operating income exceeded expectations by 82%, despite increased marketing expenditure. Jefferies maintained a Buy rating on Nike, emphasizing the company’s efforts to address excess inventory and improve wholesale relationships, projecting sales growth and margin improvements in the coming quarters. Meanwhile, Morgan Stanley (NYSE:MS) adjusted its price target to $64, acknowledging a potential bottoming out of Nike’s fundamentals while maintaining an Equalweight rating due to uncertainties about long-term growth. KeyBanc retained its Sector Weight rating, recognizing progress in Nike’s strategic initiatives but cautioning about ongoing challenges. Telsey Advisory Group reiterated a Market Perform rating with a $70 price target, highlighting Nike’s strategic transformation efforts, including inventory reduction and product portfolio rebalancing. These developments reflect a period of transition and strategic realignment for Nike as it navigates market challenges.
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