Citing Nike's (NKE, Financials) turnaround under CEO John Donahoe, Jefferies upgraded the world's largest supplier of athletic shoes to a Buy rating and changed its price target to $115.
Nike was ranked as a top choice by the investment company as it points to initiatives meant to solve distribution and product-related issues while recovering market share. With predicted EPS of $3.50, higher than the $2.95 consensus forecast, analysts predict a V-shaped margin and profits per share recovery by fiscal 2027.
Less product innovation and a move toward digital sales at the price of wholesale relationships caused Nike's footwear market share to drop 140 basis points from its peak in 2020 to 23% in 2023. With employment announcements for product jobs climbing from 1% in fiscal 2024 to 10% year-to-date in fiscal 2025, the firm is currently rebuilding wholesale connections and investing in new product innovation.
Survey results show that Nike's brand strength is still strong despite recent challenges; Jefferies notes that internal mistakes rather than competition pressure explain recent losses. As Nike focuses on important categories, analysts expect its market share to stabilize in the low-to mid-20% range.
With a low 30s price-to-earnings ratio on fiscal 2027 EPS, Jefferies sees the company as underpriced and projects a 20% upside vs consensus projections.
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