Nike (NKE) PT Lowered to $47 at Telsey

Telsey analyst Christina Fernandez lowered the price target on Nike (NYSE: NKE) to $47.00 (from $55.00) while maintaining a Market Perform rating.

The analyst comments "Nike's 4QF26 came in slightly better-than-expected across sales, gross margin and operating margin after excluding a tariff refund benefit of $0.52. Sales were in line with our forecast in NA, slightly better in China and APLA, and slightly worse in EMEA. The gross margin benefited from lower discounting in the quarter, while Nike has been more disciplined with SG&A expenses, including marketing. Nike noted a slowdown in global consumer demand beginning in April and continuing in May, which was more pronounced in the sportswear category (down DD). This has led to lower sell-thru and order books for the remainder of 2026. As a result, Nike expects 1QF27 revenues to decline LSD-MSD vs. ~(1%) in 4QF26, with further deceleration expected in 2QF27. A positive, however, has been strong sell thru of World Cup merchandise (2.5x more kits sold at this stage of the tournament vs. the 2022 World Cup), which has led to an improvement in the sales trend in June. On the profit side, commentary was encouraging with the gross profit now expected to increase beginning in 1QF27, one quarter ahead of plan. All in, Nike still forecast flat EPS for the 4QF26-2QF27 period but with lower sales offset by stronger profitability. The company also confirmed it plans to host its investor day this Fall, on November 16-17, where it will provide FY27 guidance and update its long-term financial targets. Overall, the Nike turnaround is progressing slowly. The company is making the right moves by focusing on sports, rebalancing the product portfolio by increasing newness and reducing the reliance on classic franchises, and strengthening relationships with wholesale partners, particularly in North America. However, sales trends remain weak in large parts of the business—sportswear, international, and DTC—and likely won't show meaningful improvement until FY28. We expect the stock to remain range bound until there is greater visibility on Nike's path back to sales growth and operating margin expansion. We maintain our Market Perform rating and are lowering our 12-month price target to $47 from $55, based on applying a P/E multiple of ~23x to our FY28 EPS estimate of $2.05."

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