Bad news hit for shoe titan Nike (NKE) as it came off on the bad end of an analyst report. Reports from CNBC noted Citi cut its rating on the shoe leader, and that kicked off a crisis of faith among investors. In fact, Nike shares slid over 2.5% after the news hit.
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Citi analyst Paul Lejuez cut the rating on Nike from Buy to Neutral, and also sent the price target tumbling as well from its original $102 to its current $72. That puts Citi’s price target very close to Nike’s Thursday closing price, which investors have since backed off.
The reason for the cut: a less than encouraging meeting between Lejuez and Nike’s current CEO Elliott Hill. Following that meeting, Lejuez noted “…we no longer believe F26 will inflect the way we hoped, either on the sales or EBIT margin line.” That was bad enough, but it got worse, as Lejuez pointed out “We believe F26 consensus est (imates) are too high, making the turnaround timing much less visible, and we no longer have the patience or conviction to wait another year.”
One Big All-Star Weekend
Nike, for its part, is out to prove Citi wrong, and has a plan to make some gains with the upcoming NBA All-Star Weekend 2025. It is readying a line of special sneakers for the event that will hopefully revitalize shoppers and get more sales on the board.
Nike plans to introduce a “Black Label” collection of shoes around several of its biggest-named endorsers. On the list is LeBron James, Kevin Durant, and Devin Booker, among several others. The “signature models” will feature premium materials as well as limited-edition runs, which should help make them more attractive. Moreover, it also plans to bring back the Galaxy Foamposites, as well as a “retro pack” of older models like the Dunk Lows and the Air Force 1s.
Is Nike Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NKE stock based on 14 Buys and 14 Holds assigned in the past three months, as indicated by the graphic below. After a 31.44% loss in its share price over the past year, the average NKE price target of $84.58 per share implies 21.12% upside potential.
