Williams Trading reiterates buy rating on Nike stock amid expected recovery

Investing.com - Williams Trading has reiterated its Buy rating and $73.00 price target on Nike (NYSE:NKE) stock, currently trading at $62.54, identifying the fourth quarter of fiscal 2025 as the bottom for year-over-year sales and margin trends. According to InvestingPro data, analyst targets range from $38 to $120, with the stock currently showing signs of being slightly undervalued based on Fair Value analysis.

The research firm notes that while direct-to-consumer channels, especially digital, will remain challenged as Nike shifts focus to full-price selling, wholesale channels are showing signs of positive inflection on both comparable and non-comparable bases. The company maintains strong financial health with an overall "GOOD" rating from InvestingPro, supported by a solid current ratio of 2.19 and consistent dividend payments for 42 consecutive years.

Holiday 2025 gross wholesale orders are up year-over-year, while Fall 2025 orders are approximately flat compared to the previous year, according to Williams Trading’s analysis. Net Fall wholesale shipments are expected to decline year-over-year due to returns to vendor and some cancellations as part of Nike’s marketplace cleanup efforts.

Williams Trading expects the marketplace to be clean by the end of the second quarter of fiscal 2026, with most issues resolved by the end of September. The difference between gross orders and net Holiday shipments is anticipated to be minimal.

The firm also points out that while significant off-price channel shipments from recent quarters won’t be repeated in late fiscal 2026, initial shipments to Amazon (NASDAQ:AMZN) and Shoe Show are likely to offset much of those sales at higher margins.

In other recent news, Nike reported its fourth-quarter fiscal 2025 earnings, which exceeded market expectations despite a year-over-year decline. The company posted earnings per share of $0.14, slightly above the consensus estimate of $0.13, with revenues declining 11% on a constant currency basis. Analysts from Needham and Evercore ISI both raised their price targets for Nike, citing improved guidance and better-than-expected results. Needham increased its target to $78.00, while Evercore ISI set it at $90.00, maintaining a Buy and Outperform rating, respectively.

Stifel maintained a Hold rating with a $64.00 price target, noting the steepest revenue decline since Nike’s Win-Now strategy began but highlighting positive wholesale order growth. Morgan Stanley (NYSE:MS) also raised its price target to $64.00, indicating that Nike’s fundamentals might be stabilizing. Jefferies reiterated its Buy rating with a $115.00 target, emphasizing Nike’s efforts to address excess inventory and improve wholesale strategies.

Nike’s first-quarter revenue guidance suggests a mid-single-digit decline, better than previous expectations, and analysts are optimistic about future growth. Evercore ISI highlighted that Nike’s holiday orders have improved and are now positive year-over-year, even considering challenges in China. Despite ongoing headwinds, analysts project margin improvements and potential sales growth in coming quarters.

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