NIKE Inc. (NKE) has become a lost company. It has perhaps one of the most recognized brands in the world. People love sports and need to keep exercising. And when they aren’t doing that, they still need to wear clothes. Nike’s long-term investors have to be incredibly demoralized by now. With another upcoming earnings report due soon, and with a new CFO having been named, will investors be able to find any reason to stick with Nike in their portfolio?
Oggonomics would warn against merely chasing analyst ratings and price targets, even in companies with long track records like Nike. What is undeniable is that Wall Street expectations keep getting worse despite hopes for a turnaround. Nike was going to be a long turnaround as is. Investors just have to worry that some turnaround stories never really quite turn around. Is that going to be the case for Nike?
Nike’s “new” CEO Elliott Hill has now been in charge for more than 18 months. He came out of retirement to replace John Donahoe after declining sales. , who took over the role in October 2024 after returning from retirement to lead the company’s turnaround efforts. Without adjusting for dividends, here is what the stock did around Elliott Hill’s return:
- September 19, 2024 (announcement date) Nike jumped from $80.98 to $86.52 the next day on massive trading volume.
- October 14, 2024 (effective date of CEO start) Nike was at $81.60.
Nike’s stock price at this time is $41.25, and its 52-week trading range of $40.00 to $80.17 should easily spell out what the market sentiment is just ahead of its upcoming earnings report. It may not even feel fair to point out that Nike’s stock was above $150 back at the end of 2021.
CAN NIKE TAKE MARKET SHARE?
Some companies get to the point that taking more market share becomes a mathematical impossibility. Nike is already a premium brand, and it seems that there is never an end to new companies wanting a piece of the global sportswear market.
According to WallStreetZen, Nike’s global market share of sportswear segment is about 43.7%. Here are the other sportswear brands’ market share behind it:
- Adidas 23.7%
- Puma 7.6%
- Anta 6.6%
- Lululemon 5.8%
- Under Armour 5.6%
With nearly double the market share of its next competitor, where can Nike actually grow its share? And with consumers always feeling the pinch in their pockets, how can a premium brand then take more away from other brands that may be more affordable?
WHY WALL STREET CAN’T SEE A RECOVERY
June-2026 has been a rough month of tough love for Nike investors. The stock fell about 10% in June, and the shares were last seen down 35% year-to-date. Analysts on Wall Street have issued even more downgrades and price target cuts, and even the firms that have tried to remain positive have slashed their price targets for investors looking a year out. All of this sets a cautious stage ahead of Nike’s upcoming earnings.
KeyBanc Capital Markets was the latest to downgrade Nike on June 26, cutting it to Sector weight from Overweight — with no price target. KeyBanc shows that Nike’s turnaround plan is running slower than the market had anticipated, and the persistent weakness in China and Europe isn’t helping. And KeyBanc also notes Nike’s competition from newer brands, as well as another management shakeup (new CFO). Now the firm suggests waiting for Nike’s next Investor Day to see if its recovery is really underway. And KeyBanc also points out that, even with the uncertain outlook and problems, Nike shares are valued at premium to peers.
Also on June 26, Oppenheimer maintained an Outperform rating while gutting its price target down to $60 from $120. Is it fair to ask an analyst how they can keep a positive rating while telling their clients that their price target expectations are now only half of what they had been? Oppenheimer’s take ahead of earnings — Nike sees “in-line but still soft” results with management likely to stress aggressive repositioning efforts, ongoing internal disruptions, macro headwinds, and an expectation that this year is still viewed as a restructuring year.
On June 25, BTIG maintained its Buy rating but cut its price target down to $55 from $75. BTIG’s positive rating remains focused on recovery in the Greater China region and sustainability improvements in North America. Still, BTIG expects revenue to be down around 20% in Greater China and that the challenges in the region will take time to resolve.
On June 23, Goldman Sachs reiterated its Neutral rating but cut its price target to $46 from $52.
On June 23, Evercore ISI downgraded Nike to In-Line from Outperform and cut its price target down to $46 from $57. Evercore ISI noted that Nike is about two years into the turnaround. It saw unexpected new resets lower in Nike’s wholesale channel and a lack of real innovation giving pause for a longer view. The firm also warned that parts of Nike’s core business are still weakening and that there may be more order cancellations or cuts than when Nike issued previous guidance. The firm now worries that Nike may have to temper consensus expectations lower again.
On June 10, UBS reiterated its Neutral rating while cutting its target down to $50 from $54.
On June 10, Citigroup reiterated its Neutral rating and cut its target to $47 from $53.
On June 10, RBC Capital Markets downgraded Nike to Sector Perform from Outperform and slashed its target down to $50 from $70. This downgrade cited that Nike’s turnaround has been “slower and narrower” than expected and cited a lack of growth engines. RBC also pointed out that Nike’s valuation is elevated versus peers.
CURRENT VALUATION METRICS
Nike is still valued, even after such weak stock performance, at 23-times expected earnings. And even with shares down so much, its market cap is $61 billion. Its dividend currently offers right at a 4.0% yield for investors at current prices, but the $1.64 annualized payout per share (after a 2025 dividend hike) is against consensus earnings estimates this year of $1.51 per share. It earned $2.16 per share a year earlier. Nike won’t likely face the decision of having to cut its dividend if earnings can hold up, but its payout is now quite high.
Nike’s revenues have been pressured. Sales of $51.2 billion in 2023 went to $51.36 billion in 2024 and then down to $46.31 billion in 2025. Consensus estimates are $46.3 billion in 2026 and $46.4 billion in 2027.
WHAT IF WALL STREET IS WRONG?
Oggonomics always warns investors that analysts can be wrong. Analysts downgrade stocks into bad news and keep cutting their price targets as bad news persists. It is very frequent that those analysts miss the bottom. In fact, that happens a lot. And Wall Street’s effective price targets often revolve around sentiment that gets in the way of “catching the bottom.”
One such instance in a high-profile stock that Wall Street missed the boat was Target. Now Target is up 50% from its lows and Wall Street has embraced its turnaround. Whether or not this will happen with Nike remains to be seen.
All price targets and formal analyst ratings mentioned above have been sourced to each firm issuing those reports. Oggonomics does not issue formal ratings and price targets on individual stocks.
