Several analysts have reduced their EPS targets for Nike’s fiscal year ended May 31, 2025 in recent days ahead of Nike’s quarterly report next week due to weaker-than-expected sales in the first half of the current fiscal year and concerns about how quickly investments the company has made in innovations will take hold.

Nike will report fiscal fourth-quarter results on June 27 after the stock market closes.

Specifically, many analysts expect Nike will have to reduce its sales expectations for the first half of the current fiscal year based on various channel checks. On the company’s March 21 fiscal third-quarter call, Nike reported it expects sales to be down low-single-digits in its first half. At the time, Matt Friend, Nike’s CFO, said the sales decline would reflect “near-term headwinds from lifecycle management of our key product franchises, more than offsetting the scaling of new products, as we shift our product portfolio toward newness and innovation. This also continues to reflect the subdued macro outlook around the world.”

Friend still forecasted Nike’s sales would increase for the full year as sales will “inflect in the second half” on the success of new product launches and marketing investments.

Given Nike’s guidance, analysts’ consensus estimate for Nike’s sales for FY25 is $52.4 billion, up about 1.3 percent from consensus estimates of $51.7 million for FY24.

Several analysts have also, in recent days, taken down their FY25 EPS estimates for Nike due to the likely sales shortfall. Consensus estimates call for EPS of $3.94 against $3.75 expected for FY24.

Nike, in general, is expected to meet or exceed current fourth-quarter targets, as typical. Consensus estimates call for earnings of 85 cents and sales of $12.9 billion in the fourth quarter against EPS of 66 cents on sales of $12.8 billion reported in the same period a year ago.

Several analysts reduced their price targets but kept “buy” ratings on Nike given the stock’s depressed valuation versus historical levels and some hope for a revival in growth in calendar year 2025 with the payoff from innovation investments. Shares of Nike closed Wednesday at $94.78, down from $108.57 at the start of the year and a recent high of $179 in November 2021.

The following is a roundup of recent notes from several analysts.

Evercore Trims Nike’s FY25 EPS Estimates And Price Target
On June 17, Evercore ISI lowered its FY25 estimate for Nike to $3.60 from $3.90. Analyst Michael Binetti said Nike’s business appears to have become “incrementally tougher” since the company’s March quarterly update.

Binetti wrote, “Our checks have shown mixed results with key launches in F4Q, and some signs of order cancellations for Fall 2024 — which we think will result in Nike lowering its preliminary guidance that F1H25 revenues will only decline low-single digits.”

Evercore now expects Nike’s revenues for the first half of FY25 to decline 4 percent year-over-year versus its prior expectation of a 1 percent decline and analyst’s consensus expectation calling for a decrease of 1.5 percent.

Among regions, Binetti said his team’s channel checks show new launches, including AirMax DN, Jordan 4 Blue/White, and “saw mixed success” amid “some signs of Fall 2024 order cancels.” The analyst noted that product updates for CY24 are “minor, with more truly transformative product coming in Spring 2025 (with a step-change acceleration in Fall 2025).”

Binetti noted that Nike has started re-establishing its Ekins field rep force after eliminating them four years ago. Binetti believes Ekins “have been key to driving share gains over time” in the past.

In other regions, Nike in Europe also sees signs of order cancellations for fall and is feeling pressure from a “rapid fashion shift toward Adidas” as it tries to clear Jordan, Air Force 1 and Dunk products, according to Binetti’s note.

In China, Evercore’s channel checks indicate potential order reductions in the third quarter of the calendar year, although the region has recently been performing well for Nike.

Evercore trimmed its price target on Nike to $110 from $117 as Binetti expects some investors will be disappointed with the likely lower outlook. However, he still has an “Outperform” rating on the stock, given the stock’s comparatively low valuation versus historical trading levels and because he sees a “meaningful turnaround building” for the calendar year 2025. Binetti wrote, “Our extensive channel work shows Nike is acting aggressively to clear inventory, investments for growth are being deployed (with a large war chest from $2B cost saves), and we’ve heard confidence from even the most skeptical of Nike retailers that the innovation in the pipe for 2025 is much better.” 

Stifel Sees Nike’s FY25 Guidance Still “Within Reach”
In a June 17 note, Stifel’s Jim Duffy wrote that he’s comfortable with his estimate for the fiscal fourth quarter, calling for Nike to net 92 cents a share, which is well ahead of Wall Street’s consensus target of 85 cents. The upside is expected to be supported by Stifel’s expectation that SG&A cost improvement will come in better than analyst expectations.

Duffy also said that the consensus FY25 estimates “look within reach.” Stifel expects EPS of $4.10, ahead of analysts’ consensus estimate of $3.94.

The analyst believes the investor focus on its fourth-quarter call will be on specific guidance for FY25 across the first and second half. Other areas of focus are expected to be the Olympics; early learnings from deliberate franchise management strategy; momentum in newer, hyped styles (Vomero 5, P6000, V2K Run); response from recent launches (Air Max DN, Pegasus 41); and the timing of planned future innovations.

Duffy also said he’s “intrigued by the momentum around women’s basketball, with the WNBA scoring record ratings since kicking off the season on May 14. Duffy wrote, “Female basketball participation, athlete innovation, fan excitement appears stronger than ever, expanding the consumer set for the category as a whole. Within basketball culture, the Dunk, Air Force 1, and Jordan brand remain highly relevant, and we expect performance of these styles will improve with better management of supply in the marketplace.

Duffy reiterated his “Buy rating at a $117 price target and expects “the return to growth becomes more tangible ahead of an analyst day Nike plans for later in the current calendar year. The analyst wrote, “Big picture, we see Nike management taking appropriate steps to re-architect the go-to-market model, but shares are valued for growth, not earnings power from cost reduction. We don’t expect positive rerating of shares until inflection to growth and resulting operating leverage becomes more tangible (perhaps with early signs of building momentum late summer).”

Goldman Sachs Sees Investors Seeking Innovation ‘Greenshoots’
In a note from June 11, Goldman Sachs’ Brooke Roach reiterated her “Buy” rating at a $118 price target. She said innovation remains a focus for investors.

“Our investor inbounds continue to center on the company’s accelerating innovation pipeline on the back of several quarters of weaker trends,” she wrote. Roach noted that Nike at an event held in Paris in April displayed several 2024 innovations, including the Air Franchise and Pegasus Premium, while discussing the start of a multiyear innovation cycle. She said, “We are encouraged by the greenshoots in Nike’s innovation portfolio, and look for a greater understanding of NKE’s future innovation pipeline and plan to scale these new innovations on the company’s F4Q earnings call.”

Other areas of investor focus expected to come out of Nike’s Q4 call include to what degree accelerated product franchise lifecycle may negatively mpact sales growth, particularly within DTC, as well as the potential for gross margin improvement. Goldman’s channel checks show “material improvement” in NKE’s discount cadence. Roach concluded in her investment thesis, “While we continue to see a choppy near-term path for growth, we continue to believe NKE will benefit from innovation reacceleration, a strengthening inventory backdrop (and lower promotional activity), and margin recapture.”

UBS: Nike’s Stock Needs a Catalyst
UBS analysts in a June 18 note doubted Nike when it reports Q4 earnings will be able to indicate growth is set to resume to serve as a catalyst for the stock.

“Our channel checks suggest Nike’s global sales growth trend remains weak,” Jay Sole, UBS’ lead analyst in the space. He said UBS Evidence Lab and industry data, plus UBS channel checks, indicate Nike’s U.S. DTC sales growth rate “remains soft” and China’s sales trend for Nike is “lackluster.” Foreign-currency headwinds have grown worse since Nike last reported and reads across Nike’s competitors and retail partners “give more negative than positive signals.” Sole also doesn’t see any promising innovation helping drive upcoming first-half growth for Nike and said UBS’ research finds Nike promotions “remain elevated.”

Sole wrote that while Nike could deliver better-than-expected margins in the fourth quarter, investors are more focused on Nike’s sales outlook. Sole still reiterated his “Buy” rating at a $125 price target. He wrote, “While we don’t expect a great report, the reason our rating remains Buy is we expect Nike’s sales growth rate to inflect at some point over the NTM. We think this will push Nike’s P/E higher when it happens.”

Wells Fargo Sees Nike Brand Heat Weakening
Wells Fargo reduced its sales and revenue estimates for Nike’s FY25 year below Wall Street expectations as it believes a combination of weaker checks around DTC reads, supplier commentary and brand heat will weigh on sales over the next two quarters.

In a note from June 10, analyst Ike Boruchow wrote, ‘We believe NKE numbers are again coming down, as impacts from both 1) a tougher macro and 2) their own needed reset will weigh more heavily on 1H25 than originally thought.”

Wells Fargo’s EPS estimates for FY25 were reduced to $3.70 from $3.90 in sync with reduced revenue estimates for the first and second quarters of Nike’s current fiscal year. Analysts’ consensus estimate for FY25 had been $3.96.

Calling out the positives, Boruchow noted that momentum at U.S. wholesale for Nike “appears to be turning positive with the brand’s largest accounts, Dick’s Sporting Goods and Foot Locker, calling out Nike’s innovation progress on recent quarterly calls, as well as favorable reads being heard around Nike and athletic footwear within the off-price channel.

However, the analyst noted that based on SimilarWeb web traffic data, Nike’s DTC traffic “decelerated meaningfully throughout its latest quarter. Social media mentions also declined 24 percent and 17 percent for TikTok and Instagram, respectively, in the period, indicating cooling brand heat. Boruchow wrote, “This appears to signal that recent launches/green shoots and marketing buzz were not enough to move the needle upwards for NKE just yet.”

Finally, Boruchow wrote that recent industry checks with Nike suppliers “keep our revenue assumptions subdued.”

Wells Fargo kept its “Outperform rating while trimming its price target to $115 from $120 as Nike has become more of a “show me stock. Boruchow wrote, “While we no longer view NKE as a “Top Pick at this point (our fundamental call has been wrong thus far in 2024), we remain upbeat on the risk/reward given where sentiment lies relative to their eventual turnaround potential.”

Williams Reiterates “Sell” Rating on Nike, Cuts Guidance/Price Target
Williams Trading, which reduced its rating on Nike to “Sell on May 18, further slashed its price target to $75 from $81 on June 19 while lowering estimates ahead of Nike’s report. Williams’ estimate for the current quarter was cut to 80 cents from 86 cents previously. For the full year, EPS estimates for Nike were reduced to $3.76 from $3.81 for the current year, to $3.59 cents from $3.76 for FY25, and to $4.08 from $4.26 for FY26.

Analyst Sam Poser believes Nike’s initial FY25 outlook provided in March “will likely need to be lowered, but he’s unsure it will happen on next week’s call. He said that while Nike predicted a sales recovery in the back half of FY25 with a boost from new product offerings, “we do not share management’s confidence.

Much of the expected decline in the first half of FY25, Poser wrote in a note, reflects planned reductions of Air Force Ones, Dunks, and Jordan 1s in the marketplace to make way for new product introductions, with a focus on Air. However, he said checks indicate the Air franchise “is getting old, and while many of Nike’s most loyal consumers still like the brand, they’re unwilling to pay full price for most product. Poser added, “Jordan Retro sell-through rates have fallen off, and many retailers have begun to promote those items that did not sell, which would have been unheard of just a few years ago.”

Poser added that Nike’s main rival, Adidas, appears to be “getting its act together with its Originals line-up and promising receptions for upcoming running and basketball launches, based on channel checks.

In running, with few exceptions such as the Vomero and P6000, Nike has “lacked innovation with generally “disappointing sales so far of the new AirMax DN running model, based on proprietary checks. Poser believes Nike is losing share to Asics, Brooks, Hoka, New Balance, On and Saucony.

Poser suspects Nike may use its leverage as the dominant sports player to increase allocations across wholesale for calendar 2025 to meet growth targets but risks having to cut prices and brand dilution if the product doesn’t perform.

Overall, Poser said Nike needs to return to a “pull model, believing keeping supply below demand has been “the tenet of NKE’s success over the years.He’s unsure whether the current management team is up to the task. Power wrote, “The lack of talent has led to push model, generally weaker than normal sell-through rates, and increased promotional activity.”

Guggenheim Sees “Some Early Successes” In Nike’s Innovation Push
In a quarterly preview note from June 18, Guggenheim’s Bob Drbul wrote that while “continues to navigate macro volatility and dynamic conditions in many geographies, our checks indicate that the company is experiencing some early successes in its 3-year product innovation cycle.”

He cited the recent June Pegasus 41 launch, the April Alphafly 3 launch, and continued scaling of the Air Max DN from its March launch. Drbul added, “Our channel checks indicate a strong upward trend over the past 4 months in combined web traffic search for Pegasus, with May search data more than doubling since last December, and recording the third-largest month of attracted traffic since January 2021. We believe these successes can help provide momentum into 1H25 around the Paris Olympics as Nike continues to build its 3-year innovation cycle.”

The analyst still said Nike faces a number of near-term headwinds, including the macro environment and lifecycle management of key product franchises, such as AF1, Dunk, and some Jordan products that that will more than offset the scaling of new products but is expected to support gross margin expansion.

Drbul maintained his “Buy” rating at a price target of $130. He wrote, “As we look to the next 12 months, we see several catalysts for the shares: 1) subdued expectations for results; 2) a focus on Sport as a potential to drive brand heat with a number of upcoming events, including: a) the European Football Championship, b) Copa America, and c) the Summer Olympics; 3) traction in the Running Category (one of the areas of focused investment to achieve its potential), anchored by numerous upcoming iterations of the Pegasus 41 as well as the AlphaFly; 4) traction in Women’s Basketball (another area of focused investment to achieve its potential), anchored by Caitlin Clark and A’ja Wilson; 5) Nike’s plan to host its investor day this Fall to lay out its expectations for its 5-year plan; and 6) a depressed valuation for a strong global brand.”

Bank of America Lowers FY25 Guidance, Reiterates “Buy” Rating
In a June 18 note, Lorraine Hutchinson, at Bank of America (BOFA), reduced her FY25 EPS guidance for Nike to $3.82 from $4.00 as she expects Nike to guide FY25 EPS below current analyst consensus estimates to reflect “slightly slower sales and currency fluctuations. She cited tough market conditions in North America and “choppy results in China.

Bank of America’s EPS guidance was trimmed to $3.82 from $3.84 for FY25 and to $4.46 from $4.50 for FY26.

The analyst reiterated her “Buy rating on Nike at a $113 price target partly because she believes investors “are prepared for the downwardly revised guidance. On April 11, BOFA lifted its rating on Nike to “Buy on Nike’s efforts to transform, cost cuts and the expected benefit from this summer’s Olympics.

For the first half of fiscal 2025, Bank of America now expects sales to be down 3.5 percent, slightly off Nike’s guidance calling for low-single-digit decline. Hutchinson wrote, “We think investors are braced for 1H sales guidance of (MSD), and the debate centers around the steepening acceleration in 2H to achieve positive FY sales growth.”

Also supporting BofA’s “Buy rating is Hutchinson’s belief that Nike has some “margin levers to bolster EPS despite less-than-expected growth in the near term.

The analyst noted that Nike will face margin pressures in the fiscal first half of FY25 as the brand emphasizes wholesale, which carries lower margins than DTC, “to amplify newness and re-establish strong placement within its best partners. Efforts to clear old product to make room for newness are also expected to impact margins. These pressures are expected to offset lower transportation costs and product cost opportunities. Hutchinson wrote, “We do not expect further ASP (average selling price) gains but do see some room to hold price while recovering some of the product cost inflation.”

Finally, a factor supporting BofA’s “Buy recommendation is Hutchinson’s team “beginning to hear about green shoots around innovation. She added, “We don’t expect these green shoots to translate into sales growth in 1H25, but building evidence of Nike’s innovation pipeline would bolster confidence in a 2H25 turnaround.”

RBC Capital Doesn’t See Nike Returning To Growth Until 2025
RBC Capital Markets in a quarterly preview note from May 24 reiterated its “Sector Perform” rating on Nike at a $100 price point.

Analyst Piral Dadhania wrote in the note, “Nike’s equity setup is heavily dependent on the implied path to return to positive revenue growth, which we do not expect until early 2025. Share price performance has lagged sporting goods peers, which reflects both earnings downgrades and valuation compression. Whilst valuation is more supportive at these levels, we believe Nike shares are likely to remain range bound until management showcases future product pipeline and category strategy in the coming months/quarters.”


Image courtesy Nike