Nike shares fall after investor meeting; analysts see prolonged challenges

Investing.com-- Nike (NYSE:NKE) shares fell on Thursday following an investor meeting with CEO Elliott Hill and CFO Matt Friend.

The meeting, held in New York, aimed to address the company’s turnaround strategy amid ongoing market challenges. Management outlined their focus on rightsizing inventory, reinvigorating product innovation, and strengthening wholesale relationships.

While the company is pushing towards a sport-centric approach and investing in demand creation, analysts believe concerns remain about near-term financial performance.

Nike shares closed 3.8% lower at $71.74 on Thursday.

Barclays (LON:BARC) maintained an "Equal-Weight" rating with a $70 price target, noting that while Elliott Hill is taking the right steps, Nike’s turnaround remains a multi-year process.

Barclays highlighted that FY26 is likely to be another year of negative sales growth before the company sees a return to profitability in FY27.

Inventory challenges, wholesale adjustments, and reinvestment in product innovation remain key hurdles. Barclays believes Nike’s culture reset and strategic realignment are necessary but will take time to translate into financial recovery.

Jefferies reiterated a "Hold" rating with a $75 price target, expressing skepticism about the pace of improvement. 

Jefferies analysts said that while Hill is a strong leader, Nike faces deeper structural issues, including a weakened product lineup, increased competition from brands like On and HOKA, and a struggling wholesale channel.

Jefferies believes that industry-wide slowdowns and continued markdowns will limit margin expansion, making the stock unattractive in the near term.

RBC Capital Markets also rated Nike at "Sector Perform" with a $70 price target, taking a cautiously optimistic stance.

The brokerage acknowledged Nike’s efforts in realigning its business but stressed that clear evidence of brand and product momentum is still lacking.

RBC expects further challenges in the wholesale segment, with margin pressure continuing into 2025. While the firm sees long-term potential, it remains neutral on the stock until more tangible signs of recovery emerge.

Analysts agree that Nike is on the right path strategically but caution that near-term pressures will weigh on performance.