on friday, raymond (NS:) James maintained Market Perform ratings on the following stocks. nike (NYSE:NKE), reflecting concerns about the company’s recent performance and near-term growth prospects. Shares are down nearly 27% year-to-date, trading at $77.96.
According to InvestingPro analysis, Nike is currently trading at a high P/E of 22.3 relative to its near-term earnings growth. The financial services company has watched Nike struggle with legacy inventory and is doubtful it can quickly scale up new innovations needed to drive significant growth.
The analyst said Nike appears to have spent much of the second fiscal quarter dealing with inventory issues, but they may not have been resolved sufficiently to beat growth expectations. This is in line with data from InvestingPro, which shows that its revenue decreased by 2.83% over the past 12 months.
Data from a variety of channels, including Google (NASDAQ:) trends, mobile app usage, year-over-year promotional activity, and insights such as: foot locker (NYSE:)’s results suggest Nike continues to face hurdles.
Nike’s second fiscal quarter gross margin is expected to be impacted by increased promotions, consistent with Raymond James channel research results. During Cyber-5, Nike.com offered more promotions compared to previous years, and Foot Locker also stepped up its promotional efforts for Nike and Jordan products.
Despite these challenges, analysts aren’t ruling out the possibility of higher earnings per share (EPS) due to expense management. Nike maintains high profitability metrics with a gross profit margin of 44.97%.
However, they caution that even if expense management improves, market sentiment toward Nike stock is unlikely to change significantly at this stage. For deeper insight into Nike’s financial health and growth prospects, including 12 additional Pro Tips and comprehensive valuation metrics, check out InvestingPro’s complete analysis.
In summary, analysts believe it is premature to declare a turnaround for Nike and recommend a wait-and-see approach as the company tries to overcome its current challenges. Raymond James’ stance indicates a neutral outlook on Nike stock, suggesting investors maintain their current positions until there are more definitive signs of progress.
Other recent news includes Nike Inc. (NYSE:). A series of important developments were observed. The company reported that its revenue fell to $50.01 billion last year. Nevertheless, Nike has announced a 10-year extension to its partnership with the National Football League, with the goal of expanding the game’s global reach and improving player safety.
In the area of financial analysis, Citi reiterates its buy rating on Nike, maintains a $102.00 price target, and expects Nike to post earnings per share of $0.58 in the second quarter of 2025. Meanwhile, Stifel maintained a “hold” rating on Nike stock and a $79.00 price target.
Despite recognizing the current challenges, Baird remains supportive of Nike and maintains an Outperform rating with a price target of $110.00. They expect a strong recovery by fiscal year 2026. Additionally, Nike has seen a change in leadership, with the appointment of Treasure Heinle as its new executive vice president and chief human resources officer.
Additionally, the company announced an 8% increase in its quarterly cash dividend, marking the 23rd consecutive year of increase. These are recent developments that continue to shape the story around Nike.
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