Nike’s Stock (NYSE:NKE) A Pre-Market Mover: Analyst Expects Multi Year Recovery

Nike's stock price (NYSE:NKE) is set for a strong start to the week, up 4.4% in the pre-market at $80 following an upgrade from JPMorgan to Overweight from Neutral. The firm significantly increased its price target to $93, up from $64, to a level that would represent the highest price for Nike in more than a year.

JPMorgan's bullish outlook is rooted in fieldwork and discussions with Nike's management, leading to the first upward revision of the firm's estimates in over a year.

The firm anticipates a multi-year recovery for Nike, forecasting high-teens to 20% annual earnings growth through fiscal 2030.

The upgrade marks a significant shift in JPMorgan's stance, which downgraded Nike to Neutral in June 2024. At the time, the downgrade was prompted by a revenue shortfall in Nike's fourth-quarter earnings report, despite the company exceeding EPS expectations.

The stock's recent performance shows positive momentum. It has risen in 6 of the last 8 trading days and is up 7.36% over the past month leading into today's move. The current price is also now firmly above both the 50-day ($66.81) and 200-day ($67.29) simple moving averages, indicating a strengthening uptrend.

Analysts forecast EPS to grow to $3.06 in 2025 and $3.54 in 2026.

While the prevailing sentiment surrounding Nike is increasingly positive, it's crucial to consider potential headwinds. The projected high-teens to 20% annual earnings growth through fiscal 2030 hinges on flawless execution of strategic initiatives and a sustained market recovery.

However, the athletic apparel market is fiercely competitive, with rivals like Adidas and Lululemon constantly innovating and vying for market share. The average price target on the street also remains to the downside from here, with some waiting for further signs of a turnaround.

Sentiment in Nike has been growing more bullish in recent weeks, and the positive surge following JPMorgan's upgrade will not do any harm to the bull thesis. Analyst upgrades and technical indicators support the bullish outlook, however, it's important to keep an eye on potential challenges as the restructuring and strategic shifts from NKE continue to play out.