Is Nike (NKE) the Best Falling Stock to Buy According to Analysts?

Nike (NKE) has long been a symbol of athletic excellence and consumer resilience, but its stock price has stumbled in recent months. As of May 2025, shares trade at $58.59—a stark contrast to the $120 price targets still whispered by some analysts. With a “Moderate Buy” consensus and a stock price hovering near multi-year lows, the question looms: Is this a golden opportunity to buy the dip, or a trap for the unwary?

Nike’s Struggles and Analyst Sentiment
Analysts are divided but cautiously optimistic. Out of 31 covering NKE in the past three months, 16 rate it “Buy” and 15 “Hold,” with no “Sell” ratings. This reflects a market caught between near-term pain and long-term hope. The most recent downgrade came from Wells Fargo, which cut its rating to “Hold” in April, citing tariff pressures and slowing demand. Meanwhile, BofA and Goldman Sachs remain bullish, trimming price targets but clinging to faith in Nike’s brand strength and innovation.

Price Targets: A Tale of Two Perspectives
The average 12-month price target stands at $79.35—a 35% upside from current levels—but the range is vast. Guggenheim sees $120 potential, while Wells Fargo’s post-downgrade target of $55 underscores the pessimism. The consensus has trended downward, dropping from $122.24 in February 2024 to $79.35 by April 2025. This decline mirrors investor anxiety over macroeconomic headwinds, including tariffs and weak consumer spending.

Earnings Slump and Revenue Woes
The numbers are stark. Analysts project Nike’s 2025 earnings to plummet 42% to $2.13 per share, with revenue falling 10% to $46.3 billion. The Q2 2025 EPS estimate of $0.11—a 78% drop from Q1—hints at deeper struggles. Margins are squeezed by tariffs, while competition and shifting consumer preferences in key markets like the U.S. and Europe add pressure.

Analysts’ Contrasting Views
- Wells Fargo: Downgraded to “Hold,” citing tariff risks and fading momentum.
- BofA: Maintained “Strong Buy,” betting on cost discipline and a China recovery.
- Goldman Sachs: Kept “Strong Buy,” pointing to product innovation and Olympic-driven demand.
- BMO Capital: Stood firm with “Outperform,” emphasizing cash flow and shareholder returns.

Comparing Nike to the S&P 500
Nike’s near-term struggles are stark compared to broader markets. Its Q2 2025 EPS growth is projected at -89.6%, versus +12.5% for the S&P 500. Even next quarter’s -47% EPS drop lags behind the market’s +3.2% growth. This underscores the uphill battle Nike faces in stabilizing its business.

Conclusion: A Risky but Potentially Rewarding Bet
Nike’s stock presents a compelling dilemma. On one hand, its falling price and bleak near-term forecasts make it risky. Analysts’ downgrades and the plunging consensus price target reflect real concerns—tariffs, weak demand, and margin erosion. Yet, the “Moderate Buy” consensus and pockets of bullishness (like BofA’s $80 target) suggest a belief that Nike can rebound.

Crucial catalysts lie ahead. Q2 earnings, due in June 2025, will test whether revenue declines are slowing and margin pressures easing. Positive updates on tariff negotiations or new product launches (e.g., Nike’s upcoming Air Max line) could rekindle investor confidence. Meanwhile, the stock’s current price offers a discount to its long-term potential: A $79 average target implies a 35% upside, while bulls see $120.

For investors with a 12- to 18-month horizon, NKE could be a contrarian play—if they can stomach volatility. The data paints a stock at a crossroads: a fallen giant with enduring brand power, but one that must prove it can navigate today’s headwinds. The question remains: Will Nike rise again, or is its fall far from over? The answer could hinge on the next few quarters—and whether analysts’ faith is rewarded.