Needham analysts trimmed its price target on Nike to $66 from $75 amid ongoing weakness in brand momentum and a slower-than-expected path to recovery.
Needham Analyst Tom Nikic wrote, “NKE still faces headwinds from rationalizing over-supplied product franchises (Jordan, Dunk), brand heat still appears to be lukewarm and they now have tariffs to contend with as well.”
Nikic noted that Needham’s channel checks show “scarce” models (retro Jordans, Dunks) are “selling slowly,” resulting in discounts on secondary-market websites such as StockX and GOAT. Online search trends for Nike, as well as “persistent double-digit declines” in credit card transactions in the U.S. direct-to-consumer channel, also point to weak demand for the brand.
The analyst also stated that, based on current tariff rates, he expects Nike to face a headwind of 200 to 250 basis points to gross margins, equivalent to approximately 50 cents per share, before taking any mitigation steps. While Nike may partially mitigate the tariff impact through pricing, supplier concessions, and other steps, Nikic noted that margin pressure will also come from clearing old inventories over the next two quarters and Nike’s efforts to rebuild its wholesale business.
Nike is expected to provide a tariff update when it reports earnings for the fiscal fourth quarter on March 20.
Nikic sees a “modest upside to 4Q25 EPS due to management’s typically conservative quarterly guidance.” He raised his estimate for the fourth quarter by 10 cents to $2.19 while lowering estimates for FY26 to $1.52 ($1.75 previously) and for FY27 to $2.15 ($2.42 previously). Analysts’ consensus estimate is $1.87 for FY26 and $2.63 for $2.63.
Nikic concluded, “While we believe that last year’s change in leadership will eventually lead to brighter days for Nike (we like CEO Elliott Hill’s vision for the company), the company still has a lot of work to do to reignite brand heat and clean up the marketplace.”
Shares of Nike closed Wednesday, June 18, at $59.51, down 49 cents. The stock’s 52-week price range is between $52.28 and $98.04.
Image courtesy Nike
