On Wednesday, RBC Capital Markets adjusted its outlook on Nike (NYSE:NKE) shares, reducing the price target from $80.00 to $70.00 while keeping a Sector Perform rating.
The decision follows Nike's recent second-quarter fiscal year 2025 earnings report, in which management discussed the necessity of resetting the business. The revision in the price target is partly due to a significant reduction in RBC's earnings per share (EPS) estimates for Nike for the fiscal years 2025 and 2026, by approximately 25%.
"Nike has a fairly long road ahead (see Deep dive review) with cal-2025 likely to be a year of resetting the business based on management comments at 2Q25 results," the analysts said.
According to the firm, it is currently too soon to determine the potential success of Nike's product and brand revitalization initiatives. As a result, RBC Capital believes that the risk/reward profile for Nike's stock is fairly balanced at this point in time.
In contrast to Nike, RBC Capital expressed a preference for adidas, citing stronger momentum for the rival sporting goods brand.
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