Nike stock surged Monday as shares received an upgrade and major price target hike.
Nike's new CEO Elliott Hill, who took over in October, has been tackling product and distribution issues "head on," Jefferies wrote in a Monday research note reported by The Fly. The efforts are "positioning the brand to again outgrow the market and take back lost share," the firm wrote. Jefferies noted that its recent survey data shows the Nike brand remains very strong, which proves its issues were self-inflicted and competitive threats are "less severe."
Jefferies forecasts a V-shaped earnings and margin recovery for Nike in 2027, which is well ahead of consensus estimates. The recovery should drive Nike stock's valuation much higher from current levels.
Jefferies upgraded Nike to buy from hold and hiked its price target on shares to 115 from 75, calling it a new top pick.
Meanwhile, Nike reports Q3 results on March 20. FactSet expects earnings of 31 cents per share adjusted, compared to 98 cents per share last year. Revenue is expected to fall almost 15% to $11.03 billion.
For fiscal 2025, analysts expect a 47% decline in Nike earnings, rebounding to 18% growth in 2026.
Nike Stock
NKE stock jumped 4.9% Monday, to close in on its 200-day moving average for the first time since March 2024. Shares rebounded above their 50-day line last week.
Nike stock has been in a downtrend since December 2023.
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