Nike poised for a comeback by 2026, but is it too late?

In the United States, investment firm Piper Sandler upgraded Nike's stock rating from neutral to overweight on January 10, 2025, indicating renewed confidence in the company’s performance. Along with this upgrade, they raised the company’s price target to $90 per share from $72, suggesting a potential upside of 26%. Despite Nike experiencing a challenging year in 2024 with a 30% decline in stock price and a 6% decrease to start 2025, analyst Anna Andreeva believes that a recovery is on the horizon. Andreeva attributes this optimism to several strategic initiatives led by CEO Elliott Hill, who is focused on product innovation, solid marketing efforts, franchise and portfolio management, as well as inventory management strategies. She predicts that these efforts could lead to a significant improvement in sales within three to four quarters, particularly ahead of the 2026 FIFA World Cup scheduled in North American cities in mid-2025. This positive outlook stands in contrast to the sentiment around Nike's stock, which is currently viewed as mixed among analysts. Out of the 42 analysts covering Nike, half rate the stock either a strong buy or a buy, while the other half have a hold or underperform rating. The increased price target established by Piper Sandler reflects a broader market belief that Nike has the capacity to rebound effectively from its current challenges. Historical precedence also supports this view, as the company has previously managed to recover from setbacks by introducing innovative products that resonate with consumers, as illustrated by their past successes in the footwear sector after facing pressure in 2018. While the potential for Nike’s recovery seems promising, investors remain cautious, awaiting concrete results from Hill’s strategy. The company’s ability to innovate, effectively market products, and manage inventory could determine how rapidly it returns to a pattern of healthy, profitable sales growth. Expectations are high, and stakeholders are closely monitoring the situation as the next few quarters unfold.