Nike (NKE) PT Lowered to $105 at Evercore ISI
Evercore ISI analyst Michael Binetti lowered the price target on Nike (NYSE: NKE) to $105.00 (from $110.00) while maintaining a Outperform rating.
The analyst comments " Nike Lowers FY25 Towards the Lower End of Our Scenarios. As we anticipated, Nike lowered its preliminary FY25 guidance— but more towards our downside scenario in our preview (in our preview here we contemplated a $3.00 downside scenario). FY25 Guidance is implied at ~$3.00-$3.40 vs our ISIe $3.60 heading into earnings (Street $3.86). We think NKE is doing many of the right things to clean up the over-inventoried retro business, accelerate innovation, and re-invest in the retail/consumer experience. That said, as we noted, this is a big machine that will take time—and Nike’s comment that it will have to pullback retro franchises harder than expected after starting the process in April/May reinforces that view. NKE’s FY25 Revenue guidance includes the following: 1) F1Q25: Down -10%, 2) F1H25: Down -HSD% (previously -LSD%), and 3) FY25: Down -MSD% (previously “up slightly”) While our checks concur with Nike’s comments that better innovation in performance categories is on the way, we think the Lifestyle/Retro categories are far bigger and more impactful to the total revenue mix. As such, guidance for F2H revenues to accelerate leaves some risk until Nike can cycle through a full 12 months of the retro pullback (which it started in earnest in April). Per our conversation with Nike, the 2H acceleration assumes a partial reacceleration in Lifestyle categories as Nike goes back to the vault to refresh classics like Killshot/Field General/Cortez to offset ongoing AJ1/AF1/Dunks pullbacks."