Nike Inc (NYSE:NKE, ETR:NKE) is poised for a major comeback, according to Jefferies analysts who recently issued a "Buy" rating for the company with a price target of $115.
This represents a potential upside of approximately 75% from its current share price of $65.80.
Despite facing recent challenges, Nike remains the dominant player in the growing athletic apparel market, and analysts believe that the company's efforts to resolve key issues will pave the way for growth.
“Nike remains the #1 brand in a growing category, with valuation at decade-old levels. So, Just Buy It,” they wrote.
Following the company’s last earnings report, Nike shares are down bringing its market capitalization below $100 billion.
Key metrics improve
The analysts noted that the last time Nike’s market capitalization was at this level was from 2016 to 2018, when Adidas launched the Ultraboost.
During that time, Nike's sales stagnated around $32 billion, with operating margins at just 12%. However, key metrics have improved since then, Jefferies wrote.
“Once Nike clears through its inventory, its product assortment will become more balanced, with CEO Elliott Hill focused on returning sport to the heart of the brand,” analysts wrote.
“As inventories improve, the business will achieve better full-price selling, thereby improving gross margin.”
If sales can return to mid-single-digit growth, surpassing $50 billion again, operating leverage and flow-through should also improve, analysts believe.
“We remain optimistic about Nike's turnaround efforts and believe Hill is the right leader to elevate the business to new heights,” they wrote.
“With a tough first half 2026 guide, the bar remains very low, but beatable. Comparisons will become easier in the latter half of the year, positioning Nike for a strong recovery in fiscal 2027.”