Investing.com — Wells Fargo lowers price target nike Inc (NYSE:) stock rose from $95 to $92, with headwinds for the sportswear giant due to weak direct-to-consumer sales, prolonged reductions in orders for major products, and increased promotional activity. warned of what was to come.
The bank also revised its revenue and profit forecasts lower than Wall Street consensus, expecting fiscal 2024 EPS of $2.50, compared to analysts’ average estimate of $2.71.
It cited lower-than-expected holiday season price cuts and weak demand for popular series such as the Air Jordan 1 and Air Force 1.
wells fargo (NYSE:) also noted that currency headwinds are increasing and supplier research suggests current “franchise management” efforts will be extended through 2025.
Nike’s DTC sales fell 24% year-over-year in the second quarter, and traffic and resale premiums on platforms like StockX also showed significant declines. Wells Fargo noted that the new management’s inventory reset strategy has been extended through 2025, potentially prolonging the company’s recovery.
“We noticed lower brand fever in Q2 as well. Social mentions in Q2 fell to -13% and -37% on Instagram and TikTok, respectively. This was due to recent launches and “Indicating that the marketing buzz was not yet enough to move NKE’s needle upwards,” the analyst wrote.
Wells Fargo maintained an “overweight” rating on Nike based on Nike’s long-term outlook once the strategic changes take effect.
