On Friday, Truist Securities adjusted its outlook on Nike Inc (NYSE:NKE), lowering the price target to $90 from the previous $97 while retaining a Buy rating on the stock. The adjustment comes as Nike's shares saw a slight decline of approximately 0.5% after the market closed, a movement that was roughly in line with the S&P 500's performance.
The revision in the price target reflects the near-term challenges anticipated as a result of new CEO Elliot Hill's intensified efforts to revitalize the company's operations. These efforts are expected to put additional pressure on the financial outlook for the second half of the fiscal year 2025 (2HF25).
Despite these immediate challenges, the firm believes that Nike's current strategy and conservative guidance could lead to future opportunities to outperform expectations and revise projections upward. InvestingPro analysis indicates that while Nike maintains strong financial health with a current ratio of 2.36 and moderate debt levels, analysts anticipate a sales decline in the current year.
The analyst from Truist Securities expressed optimism about the potential benefits of the turnaround strategy, highlighting three key outcomes: the possibility of beating and raising future financial forecasts, the creation of easier year-over-year comparisons for fiscal year 2026, and an accelerated timeline for Nike's return to growth and its premium market positioning.
In other recent news, Nike has witnessed a series of adjustments in analysts' price targets. Stifel reduced its price target for Nike to $75 while maintaining a hold rating, based on estimated earnings per share (EPS) of $2.88 for fiscal year 2027. The firm has also noted that Nike's gross margins are expected to drop significantly. On the other hand, TD Cowen reduced its price target from $73 to $69, also maintaining a hold rating, and expressed concerns over potential reductions in Nike's FY26 EPS.
Truist Securities revised its price target for Nike to $90 from $97, maintaining a buy rating. Williams Trading cut its target to $93 from $97, keeping a buy rating, and revised its EPS estimates for FY25 and FY26.
In terms of leadership, Nike recently welcomed its new CEO, Elliott Hill, who aims to reestablish the brand's roots in sports and athleticism. The company is also focusing on strengthening its direct-to-consumer channels to deliver a personalized shopping experience and increase market share.
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