Nike near-term ‘pain’ sets up fiscal 2026 recovery, says Citi

Citi says the “near-term pain” Nike (NKE) is seeing to “get clean” sets up fiscal 2026 for a recovery. The company’s fiscal Q2 beat across sales and gross margin, but with new CEO Elliott Hill in the seat, Nike is taking more aggressive actions to clean up inventory, driving a much weaker than consensus second half outlook, the analyst tells investors in a research note. However, Citi believes fiscal 2026 and 2027 “is all that matters.” The firm liked what it heard from Hill and is willing to accept the near-term earnings pain for a more visible recovery story entering fiscal 2026. It keeps a Buy rating on the shares with a $102 price target