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Investing.com - Stifel maintained its Hold rating and $64.00 price target on Nike (NYSE:NKE), currently trading at $72.47, after reviewing the company’s fiscal year 2025 10-K filing. According to InvestingPro data, the stock trades at a relatively high P/E ratio of 33.55x, with analyst targets ranging from $38 to $120.
The research firm identified that Nike’s inventory excess is primarily concentrated in Greater China and North America markets, providing clarity on the company’s current supply chain situation. Despite these challenges, InvestingPro data shows Nike maintains strong liquidity with a healthy current ratio of 2.21, suggesting adequate resources to manage its inventory positions.
Stifel noted the $5.6 billion year-over-year increase in endorsement commitments, attributing this to extensions of NBA and NFL deals that are "long-term in nature and bolster brand relevance."
The firm highlighted potential shareholder concerns regarding one-time retention awards to named executive officers (NEOs), suggesting the upcoming annual meeting may face increased scrutiny on executive compensation compared to last year’s 83% say-on-pay approval.
Stifel concluded that while the additional context from the 10-K filing is valuable, the pace of Nike’s turnaround remains the critical factor, with the firm estimating that the market’s implied earnings expectations of $3.50+ EPS would not materialize until fiscal year 2028 "at the earliest."
In other recent news, Nike is undergoing significant changes as it addresses various challenges and opportunities. The company has appointed Aaron Cain as the new CEO of its Converse subsidiary, aiming to revitalize the brand amid declining sales. This leadership change follows Jared Carver’s departure after two years in the role. Meanwhile, Nike faces potential margin pressures due to a new U.S.-Vietnam trade agreement, which raises tariffs on Vietnamese imports to 20%. To counteract this, Nike has started implementing mitigation strategies, including price increases since June. In terms of analyst perspectives, Morgan Stanley (NYSE:MS) has reiterated an Equalweight rating on Nike, citing challenges like customer loss in the sub-$100 product segment and over-reliance on core franchises. However, Argus has upgraded Nike’s stock rating to Buy, pointing to signs of recovery and successful inventory management. Argus also highlights Nike’s strategic use of its e-commerce channel to enhance pricing and its strong market position in high-end footwear.
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