Investing.com -- RBC Capital Markets lowered its price target for Nike Inc (NYSE:NKE) to $70 from $80 on the prolonged challenges in the company’s turnaround efforts. While the brokerage maintained its "sector perform" rating, noting that calendar 2025 is likely to be a reset year based on management's guidance during second-quarter results.
“We view Nike’s valuation as stubbornly elevated relative to its forward-looking prospects. Whilst we think some of its valuation premium is justified given its market leadership and size advantage over peers,” analyst said.
While Nike's market leadership supports its valuation, RBC said its current multiples, do not fully account for a slower growth profile.
RBC slashed EPS estimates for fiscal 2025 and 2026 by approximately 25%, forecasting $2.10 and $2.46, respectively, as revenue and margins face ongoing pressures.
Adidas (OTC:ADDYY) remains RBC’s top pick in the sporting goods sector, benefiting from stronger momentum.
“Nike is likely to be a market share donor in the coming years as it repositions its product portfolio, and reestablishes its brand equity and Performance category credentials which will take time in our view”
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