Nike's Turnaround is Kicking into High Gear—Buy Now Before the Rally Starts

The stock market is a game of momentum, and right now, Nike (NYSE:NKE) is showing signs it's about to turn a corner. After years of inventory overhang, supply chain headaches, and CEO turnover, the iconic sneaker giant is finally starting to run in the right direction. Let's break down why Truist's upgraded price target, improving fundamentals, and near-term catalysts make this a strategic buy opportunity—even with risks like tariffs lingering.

Truist's Bullish Upgrade Signals a Turning Tide

Truist Securities recently upgraded Nike's price target to $85, up from $73, while keeping its “Buy” rating—a bold move that highlights confidence in CEO Elliott Hill's turnaround plan. This isn't just about sentiment; the analyst cited cleaned-up inventories and stronger-than-expected holiday orderbooks, which are critical signs that Nike is finally right-sizing its supply chain.

Why it matters: Nike's shares have lagged the S&P 500 by ~15% since Hill took over in 2024, but Truist's call suggests the worst is behind it. With a current price around $61, this stock is primed for a rebound.

The Turnaround is Real—Here's the Proof

1. Inventory Cleanup: Nike slashed excess stock by focusing on high-demand categories like running shoes. Analysts note that wholesale demand is rebounding, a key metric for retailers.
2. Holiday Orderbooks on Fire: Nike's Q4 fiscal 2025 results showed holiday orders surged compared to last year, driven by new product launches like the Air Max 2025. This isn't a one-off—analysts at Piper Sandler and Stifel also highlighted running apparel category growth as a catalyst.
3. Margin Recovery: Gross margins dipped in Q4 due to discounts, but Truist points to improving liquidity (current ratio of 2.21) and reduced markdown pressure. With costs stabilizing, margins could expand meaningfully in 2026.

Analyst Sentiment is Split—but Bulls are Winning

While Truist and others see value, skeptics like Barclays and Berenberg Bank have lowered targets, citing macroeconomic risks and tariff costs. The average price target is $71.40, but GuruFocus' $96.36 valuation suggests even more upside.

The takeaway: Bulls are focused on execution under Hill, while bears worry about external factors. For now, the consensus “Moderate Buy” rating shows that positives outweigh negatives—especially with Nike's stock near a 52-week low.

Risks? Yes—but the Upside Outweighs Them

• Tariffs and Costs: U.S. tariffs could add $1 billion in expenses, but Nike is offsetting this via cost-cutting and pricing power.
• CEO Transition: Hill's first year saw mixed results, but Q4's beat-and-raise guidance shows he's gaining traction.
• Global Demand: Geopolitical risks in key markets like China are real, but Nike's digital sales and direct-to-consumer model are buffers.

Action Alert: Buy Nike on the Dip

At $61, Nike is priced for more pain—but the fundamentals suggest otherwise. With a $73–$85 price target range from bulls, this stock could rally 19–39% in the next 12 months.

Investment Strategy:
- Aggressive buyers: Dip into NKE now at $61.
- Conservative stance: Wait for a pullback to the $55–$58 range.
- Hold for the long term: This is a multi-year story if Hill can sustain margin recovery and innovation.

The market may still be skeptical, but the data tells a different story: Nike's turnaround is real, and the catalysts are lining up. Don't miss the chance to buy this iconic brand at a discount—this is a “Buy” call you can run with.

Disclaimer: Past performance does not guarantee future results. Always do your own research before making investment decisions.