On Tuesday, Truist Securities maintained its optimistic stance on Nike Inc. (NYSE:NKE), reiterating a Buy rating with a steady price target of $97.00. According to InvestingPro data, Nike currently trades at $78.43, with analyst targets ranging from $57 to $120, reflecting mixed sentiment in the market.
The stock has experienced a challenging year, down nearly 28% year-to-date. The decision follows the recent appointment of Elliot Hill as the company's new CEO, an event that has seen the stock decline by approximately 5% compared to a 6% rise in the S&P 500 index. The market's reaction reflects investor concerns over the duration of Nike's current bottoming process.
The firm acknowledges the challenges ahead for Nike but justifies the positive rating with the belief that the market sentiment has reached a sufficiently low point. Truist Securities suggests that even a slight shift towards positive commentary or signs that the new leadership could initiate a turnaround by fiscal year 2026 could lead to stock outperformance.
The rationale behind the endorsement of Nike's stock is rooted in the company's significant scale and brand equity, which are expected to contribute to a recovery. Truist Securities anticipates that the stock's performance will improve ahead of tangible advancements in the company's fundamentals.
Despite the initial downturn following the CEO transition, the firm's outlook is based on the premise that the inherent strength of the Nike brand and its market position will ultimately prevail, driving the stock's future growth and justifying the maintained Buy rating and price target.
In other recent news, Nike has experienced several significant developments.
Bernstein maintains an Outperform rating for Nike, with a price target of $109, despite a slow pace of inventory clearance for the Air Force 1 and Dunk lines that may impact FY26 margins.
Meanwhile, Deutsche Bank (ETR:DBKGn) adjusted its price target for Nike shares, reducing it from $92 to $82, while also revising its earnings per share forecasts downwards. Telsey Advisory Group and Evercore ISI also lowered their price targets and EPS estimates for Nike, citing the need for new CEO Elliott Hill to address the brand's underperformance, yet both firms maintain an Outperform rating.
In other news, Nike extended its partnership with the National Football League for another 10 years and announced an 8% increase in its quarterly cash dividend, marking the 23rd consecutive year of such increases.
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