Nike (NYSE: NKE) stock surged more than 5% during midday trading on Monday, hitting its highest level since December 2024. The jump comes after Jefferies issued an upgrade, though the stock is still down 23% over the past 12 months.
In a note released Monday, Jefferies analysts upgraded Nike to a Buy rating and lifted their price target to $115. They credit the company’s turnaround efforts, led by CEO Elliott Hill, for the optimistic outlook.
“CEO Hill is tackling product and distribution issues head-on, positioning the brand to again outgrow the market and take back lost share,” the analysts wrote. They went as far as naming Nike a new top pick in their coverage.
Despite recent challenges, Jefferies remains bullish on Nike’s future. “Survey work illustrates NKE’s brand remains very strong, proving that issues were self-inflicted and competitive threats less severe,” they explained.
The firm forecasts a V-shaped recovery in margins and earnings per share (EPS) for fiscal 2027, estimating earnings at $3.50 per share, which outpaces the consensus forecast of $2.95.
Nike has struggled in recent years, losing ground due to strategic missteps. Analysts highlighted “reduced product innovation and overemphasis of Nike Digital” as key factors. The company’s footwear market share slid 140 basis points from its 2020 peak to 23% in 2023. However, Jefferies sees this as a recoverable setback, expecting the Oregon-based sportswear titan to defend and maintain a low- to mid-20% share moving forward.
A major piece of Nike’s revival plan involves restoring wholesale partnerships and refocusing on product innovation. Jefferies pointed to a telling sign: “Job listings for product positions have increased from 1% of average monthly listings in F’24 to 10% of active listings in F’25 year-to-date.” This shift underscores the Swoosh brand’s commitment to refreshing its product lineup.
Looking ahead, Jefferies believes Nike (NYSE: NKE) stock deserves a higher valuation as its earnings rebound. The firm projects “an upside of nearly 20% to Street EPS in F’27” and argues that a “low 30s multiple on F’27 EPS ($3.50 vs Street near $3.00)” is justified. “Shares will re-rate as EPS rebounds and the market then chases the turn in fundamentals,” they added, reinforcing their confidence in Nike’s trajectory.
