Randal Konik from Jefferies thinks Nike’s stock could go up by 50%. He believes that both the company’s earnings and investor feelings have hit a low point. On Monday morning, Nike shares were near a two‐month high. This nike stock analysis shows that now is a good time to buy, as earnings seem ready to bounce back in a V-shape when prices are very low.
The analyst said that new boss Elliott Hill’s plan will help Nike work with more wholesale partners and create new products. He thinks this plan will make the company more profitable and help Nike grab a larger share of the athletic shoe market in the next few years.
In early trading, Nike’s stock (NKE) rose by 2.6%. This gain helped lift the Dow Jones Industrial Average by 0.52%. It is a good change after the stock closed at a five-year low just two weeks ago.
Konik has now changed his rating on Nike’s stock to “buy.” He had kept it at “hold” for the past 17 months. He called it his “new top pick.” He also raised his price target for Nike to $115 from $75. This new target means he expects the stock to go up by 50.3% from Friday’s closing price of $76.50.
He wrote in a note, “With shares near a valuation trough, we believe now is the right time to aggressively buy shares.” By “valuation trough,” he means the stock’s price, compared to the company’s expected sales in the next 12 months, is at one of its lowest points in a decade. This low price acts like a safety floor.
Konik also said that Nike had made some mistakes before. The company did not focus enough on new products and put too much energy into Nike Digital and selling directly to customers. He wrote, “[Nike’s] brand remains very strong, proving that issues were self-inflicted and competitive threats less severe.”
However, he believes that longtime Nike leader Hill, who took charge in October, is following the right plan. Hill is working to bring back old partnerships with wholesalers and to focus on product innovation.
Konik pointed out that job ads for product roles have grown a lot. They jumped from 1% of average monthly ads in 2024 to 10% now. He said, “We think Hill has the right playbook. It worked a decade ago, so it’s highly likely to work again.”
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This plan helped end a long low period for Nike’s stock that started in mid-2015. That long low pushed the price-to-sales ratio down to the current “trough” level.
Konik expects that the amount of profit Nike makes on each product will start to improve in a V-shaped way by 2027. He believes that earnings will go much higher than what Wall Street now expects.
A special Jefferies survey showed that more than half of U.S. buyers of athletic shoes plan to choose Nike. In addition, over 60% of people between 18 and 44 years old will pick Nike shoes.
He added, “As channel inventories rebalance along with improved product direction and execution we believe a substantial earnings recovery will ensue over the coming 2 years.”
In the past 12 months, Nike’s stock fell by 27.6%. At the same time, shares of Adidas (ADDYY) went up by 24.9%, and Under Armour (UAA) shares dropped by 15.9%. The Dow Jones Industrial Average has risen by 11% over the past year.