On Monday, Deutsche Bank (ETR:DBKGn) adjusted its price target on shares of Nike (NYSE: NYSE:NKE), lowering it to $82 from the previous $92, while keeping a Buy rating on the stock. Currently trading at $77.25 with a market capitalization of $115 billion, InvestingPro analysis suggests Nike is slightly undervalued despite trading at a P/E ratio of 22x.
The revision comes as Nike's new CEO, Elliott Hill, is set to make his first appearance on the company's conference call this week. The focus is on whether Hill will set new financial expectations, which could signal an end to the trend of negative earnings per share (EPS) revisions.
Nike had previously withdrawn its full-year guidance in the wake of the CEO transition, providing instead certain benchmarks for sales and margins. This comes as revenue has declined 2.83% over the last twelve months, according to InvestingPro data. In recent times, when companies have withdrawn or reset their guidance, the market response has often been positive, as it is seen as giving the new management a chance to establish a clear strategy for recovery.
Investors are anticipated to react favorably to a fresh start for Nike, including a more thorough inventory and franchise reset, as well as increased investment in the latter half of 2025. These steps are expected to position Nike for renewed growth in fiscal year 2026.
Deutsche Bank has also revised its EPS forecasts for Nike, reducing them by 7% for fiscal year 2025 and by 11% for fiscal year 2026. This adjustment reflects the bank's moderated sales expectations for the second half of 2025 and the first half of 2026, particularly in the North American market, as well as the impact of foreign exchange headwinds from significant currency fluctuations over the past three months.
For deeper insights into Nike's valuation and future prospects, investors can access comprehensive analysis and 12 additional key insights through InvestingPro's detailed research reports.
In other recent news, Nike has been the subject of multiple analyst adjustments. Telsey Advisory Group reduced Nike's price target to $93 from $96, citing the need for new CEO Elliott Hill to address the brand's recent underperformance. Evercore ISI also lowered its fiscal year 2025 earnings per share estimate for Nike to $2.25, down from their previous estimate of $2.70. Despite this, both firms maintain an Outperform rating on the sportswear giant.
Raymond (NS:RYMD) James, on the other hand, maintained its Market Perform rating on Nike shares, reflecting concerns over the company's recent performance and near-term growth prospects. Morgan Stanley (NYSE:MS) maintained an Equalweight rating with a revised price target of $80.00, highlighting the company's current challenges.
Citi reiterated its Buy rating on Nike, maintaining a $102.00 price target, and expects Nike's second quarter 2025 earnings per share to be at $0.58. The firm anticipates that Hill will outline a timeline for when the company expects the market to stabilize, with a general expectation that inventories will be balanced by May 2025.
Nike also announced a 10-year extension of its partnership with the National Football League, aiming to expand football's global reach and enhance player safety. Furthermore, the company announced an 8% increase in its quarterly cash dividend, marking the 23rd consecutive year of such increases. These are the recent developments shaping Nike's narrative.
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