Nike Inc (NYSE:NKE, ETR:NKE) shares moved higher after Jefferies analysts upgraded the company to a ‘Buy’ rating and boosted their price target to $115.
The analysts previously had a ‘Hold’ rating and a $75 price target on the athletic apparel and footwear brand.
They believe the company’s CEO Elliott Hill is tackling the company’s product and distribution challenges head one, positioning Nike to again outgrow the market and regain lost share.
“Nike's brand ubiquity and global distribution advantage should allow it to outgrow the market. We project an approximately 7% compound annual growth rate (CAGR) versus the Street at approximately 3%,” they wrote.
Improving product and adding back distribution should allow Nike to defend and maintain a low to mid 20% share, they believe. Missteps, including recued product innovation and overemphasis on Nike digital, allowed competitors to gain share.
“Veteran Hill has prioritized restoring wholesale partnerships and driving innovation. To that end, job listings for product positions have increased from 1% of average monthly listings in fiscal 2024 to 10% of active listings in fiscal 2025 year-to-date,” analysts wrote.
“Hill is intimately engaged with current and lapsed retail partners. We think Hill has the right playbook; it worked a decade ago, so it's highly likely to work again.”
The analysts also pointed recent survey findings that suggest continued interest and demand for Nike.
“More than 50% of US consumers planning to buy athletic footwear this year will choose Nike shoes, and more than 60% of those aged 18-44 will choose Nike,” they wrote.
“This underscores the brand's ubiquity and suggests the brand is still very strong ahead of future innovations with NikeSKIMS and in the running category.”
Jefferies sees 2027 as a V-shaped recovery year for Nike, referring to a sharp decline in its performance followed by a strong and rapid rebound to previous levels. They see upside of nearly 20% to the Street’s earnings per share consensus for fiscal 2027, projecting $3.50 compared to the consensus of $3.
“As Nike turns back on its innovation engine, channel inventories will be rebalanced and wholesale distro will be increased setting the stage for accelerating unit volumes and healthier full-price sell through driving stronger revenue growth and rising margins against a backdrop of reduced Street expectations that are now way too low,” they wrote.
Nike shares gained 5.1% at about $80 on Monday afternoon.