Baird analysts reaffirmed their Outperform rating for Nike (NYSE:NKE), maintaining a $110 price target as the sportswear giant faces near-term challenges but holds promise for a strong multi-year recovery.
The analysts anticipated Nike to meet its second-quarter fiscal 2025 guidance, which factors in several headwinds, including e-commerce softness, challenges in Greater China, and a reset in the Classics footwear category. Lower gross margins also reflect the company’s ongoing adjustments in a competitive retail environment.
While the analysts expressed caution regarding gross margin and earnings outlooks for the third quarter, citing recent weak signals from the retail sector, Nike’s leadership is reportedly focused on maintaining a healthy marketplace. Strategic innovations and an emphasis on long-term growth could position the company for a more robust fiscal 2026 rebound.
Though short-term uncertainties may pose challenges for investors reacting to quarterly results, the analysts highlighted the potential for fiscal 2027 earnings per share to exceed $3.75. This projection, coupled with an attractive valuation of 20x forward earnings, underscores Nike’s appeal for those willing to adopt a patient investment approach.