Jefferies Upgrades Nike as Turnaround Plan Gains Momentum

NEW YORK, N.Y. — Jefferies has upgraded Nike to a ‘Buy’ rating, citing encouraging signs of a turnaround under new CEO Elliott Hill. The firm’s assessment comes following a promising quarterly earnings report that hinted at a recovery in sales.

Analyst Jonathan Konik expressed confidence in Nike’s recovery plan, which includes restoring wholesale partnerships and introducing new products. The price target has been raised to $115, representing a nearly 50% increase from Friday’s closing price of $77.50.

“The low valuation and robust sales outlook present an appealing opportunity for investors,” Konik stated. He noted that Hall’s strategy is positioned to enable Nike to regain lost market share in the athletic footwear sector.

Hill, who succeeded former CEO John Donahoe last October, acknowledged the challenges that Nike faced. During the earnings call, he emphasized, “We’ve lost our obsession with sport,” pledging to put athletes at the center of every decision moving forward.

Despite the optimistic outlook from Jefferies, not all analysts share the same enthusiasm. Citi recently downgraded Nike to ‘Neutral’ from ‘Buy’, with a revised price target of $72, down from $102. Analyst Paul Lejeuz cited diminished visibility regarding the timing of the turnaround as a reason for his skepticism.

“I no longer have the patience or conviction to wait another year,” Lejeuz remarked after attending an event to meet with Hill. The conflicting views underscore the uncertainty surrounding the effectiveness of Nike’s restructuring efforts.

However, Konik remains bullish, anticipating a “V-shaped” recovery in earnings and profit margins by fiscal 2027. He believes that despite the headwinds, Nike’s brand strength will facilitate a rebound in a less competitive market.

According to data from financial analysts, Nike currently holds a Moderate Buy consensus rating on Wall Street, based on 15 Buys and 13 Holds. The consensus price target of $86.52 suggests an upside potential of approximately 13% from the current trading levels.