RBC Capital Markets raised its rating on Nike, Inc. to “Outperform,” citing improving traction in running footwear, positive channel checks, favorable survey findings, and a “refreshed organizational structure’ that should speed decision making.
The Toronto-based investment firm also raised its price target to $90 from $76 previously. Shares of Nike closed Thursday at $72.10, down 22 cents.
Among the key drivers of his upgrade, RBCs’ lead analyst in the space, Piral Dadhania wrote in note that he expects to “steeper revenue recovery shape” than current analyst estimates as the benefits of new product contribution and World Cup sell-in offset by lesser impact by ongoing inventory reduction efforts supports a return to positive growth by this fiscal third quarter of 2026 ended February 28, 2026.
He anticipates Nike’s “relative revenue performance gap” versus faster-growing peer brands will likely “troughed” during Nike’s fiscal fourth quarter, ended May 31, and should improve going forward, providing an opportunity for Nike to regain shelf space.
Dadhania further sees the World Cup 2026 potentially adding $1.3 billion, or a 3-percentage point contribution, to Nike’s revenues. The analyst estimates that Nike sponsors six of the top 10 FIFA-ranked international teams and said its U.S. sponsorship is “multiples larger than other country sponsorships.” The analyst wrote, “We view the World Cup 2026 event year as providing a revenue acceleration catalyst in Nike’s home USA market, which we believe is under-appreciated by consensus estimates, and which we believe should underpin a faster recovery profile.”
Dadhania also noted that Nike has a sizable marketing advantage over its peers, entering a strong 2026 event year. He wrote, “We expect accelerating brand visibility across 3 key countries, 5 key cities into 2026, and Nike should benefit from improving ROI and engagement metrics under the leadership of Nicole Graham (CMO).”
In product, Dadhania was encouraged by the initial progress of Nike’s “Sports Offense” strategy, which includes a successful resetting of its running assortments with a focus on a nine-box matrix across three product silos: Pegasus, Vomero, and Structure.
Dadhania wrote, “Elevated brand visibility should be beneficial, particularly as Nike’s product pipeline is already looking stronger in Running and Basketball and we expect improvements in its Apparel line-up.”
Finally, Dadhania noted that Asia channel checks suggest Nike’s clean-up is progressing in China, with forward orders picking up with retailers and suppliers. RBC’s survey data also shows “Nike resilience in the U.S. and incremental improvement in China despite the transition period.”
RSA’s 2025 Annual Sporting Goods Back-to-School Survey confirmed consumers in the U.S. and China are more interested in performance products over lifestyle products, and performance footwear, “which supports Nike’s brand/product pivot towards sports.”
The survey showed Nike retained its leading brand preference position in the U.S., with a slightly lower response rate, while Air Jordan slipped to 4th place, replaced by New Balance. Dadhania said, “Broadly speaking, technical brands (such as The North Face, Columbia, Lululemon, Saucony, Hoka and On Running) have gained relevance, whilst more established brands have lost relative share.”
In China, Nike retains its No. 2 position, with a significant increase in response rate in 2025 compared to 2024, and the highest in RBC’s BTS survey data. Air Jordan remains in the number six position with an improved response rate of 19 percent, up from 14 percent.
Image courtesy Nike (Vomero)
