Nike a ‘Franchise Pick’ at Jefferies, Firm Reaffirms Price Target on Stock (NYSE:NKE)

Nike's stock (NYSE:NKE) is in focus today as Jefferies added NKE to its “Franchise Picks List,” signaling confidence in the athletic apparel giant's recovery by reaffirming a $115 price target. The firm's bullish outlook contrasts with recent market headwinds, suggesting a potential undervaluation of Nike's long-term prospects.

Jefferies highlights that holiday order books are already showing year-over-year growth, hinting at strong consumer demand despite broader economic uncertainties. The firm anticipates Nike achieving a clean inventory position by the first half of 2026, which would alleviate margin pressures and set the stage for improved profitability. Their FY27 EPS forecast for Nike is notably above consensus estimates, underpinning their buy rating and $115 price target.

Nike has been actively restructuring to streamline operations and refocus on core strengths. A recent announcement detailed plans to reduce less than 1% of its corporate workforce, part of a broader turnaround strategy under CEO Elliott Hill.

This initiative aims to bolster key segments like running shoes and sneakers, improve retailer relationships, and expand the company's physical store presence. The restructuring involves organizing into cross-functional teams centered on sport and sport culture, designed to strengthen connections with athletes and consumers. These layoffs follow a previous 2% workforce reduction in 2024, implemented to cut costs amid declining demand.

In May, Nike also implemented significant leadership changes, promoting Amy Montagne to President of Nike, among other key appointments. This reshuffle is intended to accelerate the company's “Win Now” action plan, dividing leadership into Consumer and Sport, Marketing, and Product Creation areas, all reporting directly to CEO Elliott Hill.

As Nike executes its strategic turnaround, the market will closely monitor its ability to navigate these challenges and capitalize on growth opportunities. Jefferies' “Franchise Pick” designation suggests confidence in Nike's long-term potential, but the company must demonstrate tangible progress in improving sales, margins, and overall market position to justify this bullish outlook.