Stifel Nicolaus analyst Peter McGoldrick has maintained their neutral stance on NKE stock, giving a Hold rating on December 26.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Peter McGoldrick has given his Hold rating due to a combination of factors related to Nike’s ongoing turnaround and its current valuation. He sees encouraging operational progress, including healthier inventory levels in North America that support the thesis of a domestically led recovery, and early signs that the apparel category is regaining volume momentum. He also notes that the company’s renewed emphasis on wholesale distribution, with the highest North America wholesale mix since the pandemic, appears more aligned with Nike’s future channel strategy, even though it entails lower average selling prices. However, footwear unit trends remain lackluster, and the overall volume trajectory is not yet strong enough to confidently underpin the mid-single-digit revenue growth needed to drive the financial model.
At the same time, McGoldrick believes the equity market is already assigning Nike a premium valuation multiple that assumes successful execution of the turnaround over the next several years. With the shares trading at roughly 25 times his FY27 earnings estimate, he views the upside potential as limited relative to the risks associated with restoring market share and normalizing the business, which he expects may not fully materialize until around 2027. While he characterizes the eventual turnaround as likely, he does not yet see a sufficiently asymmetric risk/reward profile to justify a more constructive recommendation. As a result, he maintains a neutral stance and continues to rate the stock as Hold.
McGoldrick covers the Consumer Cyclical sector, focusing on stocks such as Nike, Columbia Sportswear, and Levi Strauss & Co. According to TipRanks, McGoldrick has an average return of -1.3% and a 41.94% success rate on recommended stocks.
In another report released on December 26, UBS also maintained a Hold rating on the stock with a $62.00 price target.