Will Nike's stock reach $120? What does Oppenheimer expect?

on Friday, Nike (NYSE:NKE) faced a tough day as its shares fell sharply. The company's iconic swoosh could have been replaced with an “oof” as the stock experienced its biggest one-day decline, falling as much as 20% after disappointing fiscal fourth quarter (May quarter) results.

While revenue and profit figures were mixed, the real disappointment came from the company's outlook. Macro headwinds and ongoing weakness in China were behind the lower sales forecast for FY25. The sportswear giant now expects a high-single-digit revenue decline for the first half of FY25, while previously projecting a low-single-digit drop. Wall Street had forecast a 2.3% decline. Additionally, Nike's guidance for the first quarter of FY25 (ended in August) estimates a revenue decline of about 10%, well below analysts' expectations of a 2.8% decrease.

Not long ago, Oppenheimer's Brian Naegle, an analyst ranked among the top 1% of Wall Street stock professionals, upgraded his rating on NKE. He cited “historically discounted stock valuations,” markedly pessimistic investor sentiment, and medium-to-long term prospects for fundamental improvement based on management's substantial “strategic repositioning efforts” as reasons for his optimism.

Does the latest readout change the 5-star analyst's outlook? Not really. While Negal acknowledged that the results and updated FY25 guidance “proved disappointing and even weaker than our Street forecasts,” he still views the readout and commentary as “likely the 'last bad' quarter for NKE and a 'healthy clearing event.'”

“NKE is working to aggressively reposition the company's global enterprise amid a backdrop of growing demand in the U.S. and worldwide markets,” Nagel added. “We expect NKE's efforts will help drive an even stronger recovery for the company as cyclical pressures ease.”

Overall, Nagel gives Nike shares an Outperform (i.e., Buy) rating, with a price target of $120 that suggests shares will rise by 59% in the coming year. (To watch Nagel’s track record, click here)

Most of Nagel's peers are almost evenly split between bulls and skeptics. With an additional 13 buy recommendations, 15 holds, and 2 sells, the stock boasts a Moderate Buy consensus rating. At $96, the average price target contributes to a one-year return of ~27%. (Look Nike Stock Forecast,

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Disclaimer: The opinions expressed in this article are solely the opinions of the featured analyst. The content is to be used for informational purposes only. It is very important to do your own analysis before making any investments.

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