Shares of Nike, Inc. climbed $4.47, or 6.4 percent, to $74.20 on Wednesday, October 1, after the company reported better-than-expected first-quarter results ended August 31. This caused several analysts to raise their price targets, although a few remain concerned about the timing of the turnaround.
Earnings came in at $0.49, compared to the analysts’ consensus target of $0.27. Sales were $11.72 billion, versus the expected $11.0 billion. Sales on a currency-neutral basis were down 1 percent, exceeding Nike’s guidance of a mid-single-digit decline.
The outperformance was boosted by a return to positive growth in North America and wholesale overall, as well as momentum in the running category, which grew 20 percent in the quarter, up from high-single digit growth in the prior fiscal fourth quarter. Other encouraging signs were that inventories were down 2 percent, indicating Nike is making progress in cleaning up the marketplace stock of classic footwear franchises, as well as spring bookings running positive, similar to holiday bookings.
On the downside, Nike continues to face challenges reversing declines in China, Nike digital and within sportswear categories. The implied second-quarter guidance came in below analysts’ consensus, and most analysts didn’t raise guidance for the year despite the quarter’s beat due to the impact of rising tariff costs and signaled promotional pressures. Nike officials indicated that tariffs would now cost it about $1.5 billion this fiscal year, compared with the $1 billion expected earlier.
The results follow several upgrades by analysts in recent weeks on signs Nike is seeing progress under its “Win Now” transformation plan and new “Sports Offense” go-to-market strategy, which involves organizing internal teams around sports across its three brands — Nike, Jordan, and Converse — rather than by men’s, women’s and kids’ categories. Of the 39 analysts covering Nike stock, six have a “Strong Buy” rating, 17 have a “Buy,” 14 have a “Hold, one has an “Underperform,” and one has a “Sell” rating, according to Yahoo Finance.
At Goldman Sachs, Brooke Roach reiterated her “Buy” rating following Nike’s earnings release while raising her price target to $89 from $85.
She said in a note, “We step away from the quarter encouraged by the sequential momentum in NKE’s performance and North America businesses. We continue to believe NKE’s strategic actions are the appropriate moves to drive a return to sustainable and profitable growth. Looking ahead, we believe dissemination of the company’s sport offense strategy to other key business units poise NKE for growth. While we acknowledge the path ahead could remain choppy, we remain encouraged by management’s upbeat commentary regarding upcoming innovation and scaling consumer marketplace reinvigoration.”
At Morgan Stanley, Alex Straton kept her “Equal-Weight” rating while slightly lifting her price target to $72 from $70.
The analyst said 1Q26 results, initial 2Q26 guidance, and Nike management’s commentary indicate the company’s “turnaround is mostly on track, albeit with imperfect trajectories by channel/geography/category.” However, she said the report “did little to solve our ongoing skepticism” that Nike can return to sales growth in the range of mid-single to high-single digits on low-teens percentage margins.
Williams Trading reiterated its “Buy ” rating at a $100 price target.
Sam Poser trimmed his EPS estimates on Nike primarily due to “worsening impact” of tariffs, although he’s confident Nike is taking the right steps to reignite growth. Poser wrote, “It continues to be clear that necessary steps are being taken to reestablish Nike’s position in the marketplace, and it will take some time. 1Q26 results exceeded guidance and consensus estimates, led by sequential improvement in revenue, led by North America and EMEA. Further, 1Q26 gross margin and SG&A sequentially improved and exceeded guidance. Despite some cautiousness around increased tariffs, it appears as if NKE is positioned to continue to exceed its guidance.”
RBC Capital Markets reiterated its “Outperform” rating and price target of $90. The investment firm upgraded its rating and price target on September 16.
Analyst Piral Dadhania said, “We believe our positive thesis on the stock is largely validated.” He said the revenue recovery trajectory is “modestly steeper” than consensus estimates based on 1Q results and the running category’s acceleration to growth of 20 percent in the quarter is “validation that new product initiatives are bearing fruit in focus areas.”
Telsey Advisory Group maintained its “Market Perform” rating and 12-month price target at $75.
Cristina Fernández said results were better-than-expected across sales, gross margin, operating expenses and EPS, marked by a “particularly encouraging” performance in North America, accelerated growth in running, and positive wholesale bookings for spring. She said the “positives were tempered by continued headwinds” from tariff costs, weak e-commerce growth, and higher promotions in China and EMEA, as well as at Converse.
Fernández said, “Overall, Nike is making the right moves by cleaning up inventory, rebalancing the product portfolio by increasing newness and reducing the focus on classic franchises, and strengthening relationships with wholesale partners. However, Nike emphasized progress will not be linear and there remains significant work to revitalize the entire product portfolio and grow the marketplace. In addition, the company still faces profit headwinds from promotions, tariffs, and lower digital sales. As such, we lack visibility to the company’s financial algorithm over the next few years.”
Barclays kept its “Equal Weight” rating while raising its price target to $70 from $65.
Analyst Adrienne Yih said Nike’s results were largely in line with its expectations, with the strong beat in the quarter “almost fully offset” by a reduction in FY2Q26 guidance due to ongoing liquidation and corrective measures in Greater China and APLA. The analyst stated, “We remain Equal Weight rated but believe the outlook is becoming more constructive as we believe the worst is behind Nike and that each successive downward revision gets it closer to the bottom. We believe the shares have limited downside as management is clearly taking the right ‘textbook’ recovery steps to stabilize margins and return to profitable growth. However, we look for evidence that margins and earnings have bottomed and NKE is entering a period of sustained ‘beat-and-raise’ financial performance.”
At Needham, Tom Nikic reiterated his “Buy” rating at a price target of $70, although he lowered his EPS estimates for the current year and next year due primarily to incremental tariff headwinds. Among the positives he cited for the quarter was wholesale returning to growth, several sports categories (running, basketball and training) “growing nicely,” and most regions outside of China finding growth.
Nikic said of his “Buy” investment rating, “This one-time darling of investors has clearly been off its game in recent years, but we believe that the worst may nearly be over. The biggest catalyst of change is the recent CEO transition, from John Donohoe (who, in hindsight, was ill-suited for the role) to well-respected Nike veteran Elliott Hill. We also believe that management is clear-headed about the mistakes they’ve made, and is working aggressively to correct them.”
Evercore ISI reiterated its “Outperform” rating at a $90 price target.
Michael Binetti said in a note, “Nike is still shining a bright light on the challenges as it navigates this turnaround, and the gross margin update is tougher than we thought—somewhat limiting bigger consensus revisions. But in our preview, we argued that the bear case will have very short duration if Nike reports Spring orders positive for a second season in a row and shows revenues starting to stabilize more broadly despite brand heat that is still arguably low. In total, we think the F1Q update damages the bear case and moves Street models slightly higher. Bottoming is a process, but we reiterate Outperform with more positives than negatives in F1Q.”
Citi Research maintained its “Neutral” rating at a price target of $74.
Analyst Paul Lejuez said the quarter’s report shows Nike is “seeing progress, but it seems largely priced in.” In his investment analysis, Lejuez said, “Over the last several years, overdistribution of key products and elevated promotions have weighed on NKE’s sales and margins. While new management is currently executing a turnaround, we believe franchise management and macro headwinds across global markets will weigh on sales/margin in F26, pushing out a turnaround in the business until F27 at the earliest.”
TD Cowen reiterated its “Buy” rating and slightly upwardly adjusted its price target to $86 from $85.
Analyst John Kernan wrote that the better-than-expected growth in North America and EMEA, along with Nike’s management’s “tone,” gives him confidence in TD Cowen’s above consensus estimates. He also expects Nike’s margin recovery “will accelerate” with gross margin pressures for the second quarter and the incremental tariffs seen as temporary headwinds and wholesale channel discounts likely moderating, with inventory declining 2 percent in the first quarter percent year-over-year.
Kernan reduced his estimates for Nike’s fiscal second quarter and the second half as Nike’s Q2 guidance came in lower than expected, although EPS estimates for FY26 are still 6 cents above consensus. Kernan stated, “Win Now suggests that there is enough conservatism built into management’s guidance that further upside potential for estimates remains as the year progresses, particularly on revenue and gross margin.”
Stifel maintained its “Hold” rating while raising its price target to $68 from $64.
Peter McGoldrick said the return to reported revenue growth are “strong signs of validation of the turnaround,” although he also noted Nike’s management’s comments that the return to growth “won’t be linear.” He said Stifel looks for “a steady building into FY27, helped by World Cup 2026.” Stifel could become “more constructive” on the stock with more evidence of healthy wholesale sell-throughs, “standout consumer adoption” of new performance product, and a pullback on Nike’s share price. McGoldrick said, “Nike remains the most important athletic brand, and our cautious view on shares reflects a pragmatic approach to valuation, which we view as full – and not a doubt of a return to healthy growth, which we view as an eventuality.”
Bank of America (BOFA) reiterated its “Buy” rating at an $84 price target. Analyst Lorraine Hutchinson said in a note, “Better than expected wholesale sales give us increased confidence that the turnaround is well underway.”
She said that although Nike’s management indicated that “progress won’t be linear each quarter,” the Q1 decline of 1 percent on a currency-neutral basis in the first quarter and Q2 guidance calling for a low-single digit decline was better than BOFA’s model.Beyond the wholesale improvement, she highlighted the progress Nike is making in the running category and the North American (NA) marketplace as well. Hutchinson wrote, “NA is furthest along in the journey of cleaner inventory, benefiting from aggressive clearance actions and momentum in performance products. We are encouraged that Spring wholesale order books are up, which is another sign of product resonating and channel inventory improving.”
BOFA maintained its FY26/27 estimates as the 1Q EPS beat and stronger sales are offset by incremental gross margin pressure and higher 2Q SG&A expense.
Image courtesy Nike
