Analysts' Views on Nike Stock Ahead of Earnings

As nike prepares to release its fiscal third-quarter earnings on March 20, 2025, analysts are weighing in with a mix of optimism and caution. The athletic apparel giant has been navigating a challenging landscape, with recent earnings reports showing a decline in revenue but consistent beats on earnings per share (EPS). Let's dive into what analysts are saying and what it means for investors.



Earnings Performance and Guidance

Nike's recent earnings performance has been a tale of two metrics. On one hand, the company has consistently beaten EPS estimates. In the second quarter of 2025, Nike reported an EPS of $0.78, surpassing the consensus estimate of $0.63 by $0.15. This trend of beating earnings estimates has been consistent, with the company exceeding expectations in the previous quarters as well.

However, the revenue side of the equation tells a different story. Nike's quarterly revenue fell 7.7% year-over-year to $12.35 billion, although this was still above analysts' expectations of $12.11 billion. The company has warned of a 10% year-over-year revenue drop in the current quarter due to a shift to a model focused on newer products and expected sales weakness in the Greater China region and online sales.

Analyst Ratings and Price Targets

The mixed earnings performance has led to a divergence in analysts' opinions. Some analysts remain bullish, citing Nike's strong brand and focus on innovation. For example, bank of america reiterated a "buy" rating, while Wedbush maintained an "outperform" rating. These analysts see potential in Nike's new product innovations and marketing efforts, which could drive future growth.

On the other hand, several analysts have lowered their price targets for Nike following the recent earnings report. Wedbush analysts reduced their price objective to $97 from $115, while Jefferies analysts changed theirs to $90 from $100. Bank of America analysts had the highest target at $104, down from $113 previously. These adjustments reflect the analysts' cautious outlook on Nike's turnaround efforts, which they believe could take time to manifest.

Market Conditions and Competition

Nike's stock has lost about 30% of its value over the past 12 months, closing the week just under $72. This decline, along with the overall market conditions, has led some analysts to be more cautious. The competitive landscape, with rivals like Adidas and Under Armour vying for market share, adds another layer of complexity.

However, Nike is looking ahead to the Summer Olympics in Paris, which start next month, as an event that could help boost sales. The company plans to spend more on marketing during the event to capitalize on the global attention. Growth in the basketball sector, long a key source of sales for Nike, has also helped offset some of the declines in other areas.

Insights from Analysts

Analysts' opinions on Nike are diverging due to several specific factors. Some remain bullish due to Nike's recent earnings performance and focus on innovation, while others are more cautious or bearish due to the company's guidance, competitive landscape, and market conditions.



Conclusion

As Nike prepares to report its fiscal third-quarter earnings, the company faces a mix of challenges and opportunities. While the revenue declines are a concern, Nike's ability to beat earnings estimates consistently is a positive sign. The upcoming earnings report on March 20, 2025, will be crucial in understanding how Nike plans to navigate these challenges and drive future growth. Investors should keep an eye on the company's guidance and any updates on its strategic revamp under CEO Elliott Hill.