On Friday, Piper Sandler analyst team upgraded Nike stock (NYSE:NYSE:NKE) to Overweight from Neutral and increased the price target to $90 from the previous $72. The move reflects the firm's optimism about Nike's future performance.
The analysts believe that Nike's CEO, Elliott Hill, has shown a heightened sense of urgency to address market challenges, including taking back products and offering markdown support to partners.
This strategy is expected to lead to a clearer recovery narrative as the company heads into fiscal year 2026, despite the current negative sentiment among investors, as indicated by a more than 30% increase in shorted shares since September.
Piper Sandler's report suggests that Nike is on track to adjust its sales strategy, reducing its reliance on the Classic franchise and shifting towards an 80/20 full-price to off-price mix. The analysts project that these changes could be implemented within the next three quarters.
The firm also provided a potential range for Nike's stock valuation, estimating a bull scenario at $100 and a bear scenario at $58. This valuation range is based on a detailed sales scenario that includes a significant reduction in Classic franchise penetration and a transition to a more favorable pricing mix.
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