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Investing.com - Stifel maintained its Hold rating and $64.00 price target on Nike (NYSE:NKE) stock Monday, citing concerns about the company’s path to sustainable growth. The stock, currently trading at $59.79 with a market capitalization of $88.25 billion, has seen a challenging year with a 37% decline over the past 12 months. According to InvestingPro analysis, Nike appears slightly undervalued at current levels.
The research firm expects Nike’s fourth-quarter fiscal 2025 results to align with Street estimates of $10.7 billion in revenue, representing a 15% year-over-year decline, and earnings per share of $0.12 in what it describes as a "messy quarter" affected by timing shifts, tariffs, and cleanup actions. Despite these challenges, Nike maintains strong financial fundamentals, with InvestingPro data showing a 23-year streak of dividend increases and a current yield of 2.68%.
Stifel anticipates Nike management will provide conservative guidance and likely refrain from offering a complete fiscal year 2026 outlook, while projecting the company could achieve flat revenue of approximately $46 billion for the year, aided by favorable foreign exchange rates.
The firm expects Nike’s marketplace cleanup actions will continue to cause revenue declines through the first half of fiscal 2026, with a potential revenue inflection possible in the second half against easier year-over-year comparisons.
Despite acknowledging Nike’s "dominant market position," Stifel remains hesitant about the company’s return to sustainable growth without evidence of new product drivers, noting its $64 price target represents 22.2 times the firm’s fiscal 2027 earnings per share estimate of $2.88. The company currently trades at a P/E ratio of 19.72x and maintains solid financial health with a current ratio of 2.19, indicating strong liquidity. For deeper insights into Nike’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Nike has been the focus of several analyst reports and corporate updates. Needham lowered its price target for Nike to $66.00 from $75.00, citing challenging near-term trends, including issues with product franchises and newly imposed tariffs. Despite these challenges, Needham adjusted its earnings estimates, raising the fourth-quarter fiscal 2025 EPS forecast to $2.18. Piper Sandler maintained an Overweight rating and a $70.00 price target, noting increased short interest and projecting $500 million in incremental sales from new distribution efforts. Morgan Stanley (NYSE:MS) also lowered its price target to $61.00, mentioning an extended timeline for Nike’s turnaround due to macroeconomic factors. Meanwhile, Citi reiterated its Neutral rating with a $57.00 price target, expecting Nike to beat fourth-quarter earnings estimates due to stronger sales and lower expenses. Additionally, Nike announced that board member Cathleen Benko will retire at the 2025 annual meeting, with her retirement not due to any disagreement with the company. These developments come as investors await Nike’s fourth-quarter earnings report scheduled for June 26.
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