BofA Securities analyst Lorraine Hutchinson reiterated the Buy rating on Nike, Inc. (NYSE:NKE) with a price forecast of $80.
After the closing bell, the company will release its fourth quarter fiscal 2025 financial results on June 26.
Hutchinson writes that the fourth quarter marked Nike’s “peak” of sales and margin pressure, as the company aggressively cleared excess inventory without enough new product innovation to compensate.
The analyst maintains a fourth quarter EPS estimate of 12 cents, in line with consensus, but sees the outlook for fiscal 2026 as the more critical focus of the upcoming earnings call.
Following recent discussions with CEO Elliott Hill, the analyst highlights growing retailer enthusiasm for Nike’s Spring ’26 innovation pipeline.
The wholesale landscape remains fluid and not all partners are thriving. But Hutchinson stresses that Nike is positioned to navigate these challenges.
The company can deepen newer retail relationships and reclaim shelf space as competitors scale back their presence, she says.
Nike is expected to outline both the mitigated and unmitigated impact of current tariffs. However, it’s uncertain what level of forward guidance the company will offer beyond the first quarter.
Hutchinson notes that Nike’s move to quarterly guidance highlights ongoing visibility challenges. With a new fiscal year starting, he writes that management must clarify when aged inventory will be cleared in wholesale and DTC, and when a sales rebound is likely.
The analyst maintains the Buy rating, seeing the potential for sales to rebound in the first half of fiscal 2026 as inventory normalizes and product innovation gains traction.
Hutchinson further writes that Nike is well-equipped to manage the current tariff environment, thanks to its strong negotiating leverage with both vendors and retailers, as well as its pricing power.
The analyst points out that Nike has already implemented targeted price hikes, including $5–$10 increases on footwear priced over $100 and some modest increases across adult apparel and equipment.
Hutchinson adds that Nike’s decision to leave kids’ products and footwear under $100 untouched was a smart move, positioning the brand to maintain accessibility.
The analyst sees Nike’s broad pricing structure and scale as advantages if consumer spending begins to tighten.
This apart, Hutchinson sees early signs of stabilization in Nike’s wholesale business, noting that Fall ’25 order books outside China are only modestly lower, with weakness in classic footwear being nearly offset by strength in performance categories.
Hutchinson has lowered his FY26 EPS estimate to $1.80 from $2.00 due to foreign exchange adjustments and reduced expectations for China, while keeping his FY27 estimate steady at $3.00.
Price Action: NKE shares are trading lower by 1.50% to $61.86 at last check Friday.
Also Read:
Image: Shutterstock
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
