Nike gets buy rating with 25% upside after brutal 40% selloff

24/7 Wall St. initiated coverage of Nike Inc. with a buy rating and a $51.21 price target, implying a 25% rebound for the sneaker giant after a punishing 12-month stretch that wiped 40% from its market value.

"The setup is straightforward — sentiment is washed out, the balance sheet is fortress-grade, and management is buying shares personally," the firm said in its July 3 note. "With 90% model confidence and the stock trading a dollar off its 52-week low, the risk-reward favors patient buyers."

Nike shares closed at $41.05 on June 30, hovering just above the 52-week low of $40. The stock peaked near $76.97 in August 2025 before sliding to current levels. The firm's bull case projects $65.78 by July 2027, a 60% return, while the bear case still puts the stock at $46.65 in 12 months.

The call comes after Nike's Q1 FY27 earnings on June 30, when the company posted revenue of $10.97 billion against a $10.85 billion consensus and diluted EPS of $0.72 versus a $0.1273 estimate — the seventh consecutive EPS beat. The headline number was inflated by a $986 million one-time IEEPA tariff recovery. Underneath, Greater China revenue fell 12%, Converse tumbled 32%, and NIKE Direct dropped 7%.

CEO Elliott Hill's "Win Now" strategy is showing early traction in wholesale, which grew 4% in the quarter, while North America revenue rose 3%. Gross margin reached 49.2%, and the company maintains an $18 billion four-year buyback authorization alongside a 24-year dividend growth streak.

KeyBanc analyst Ashley Owens flagged slower-than-expected sportswear recovery and pressure from disruptor brands as risks. Technical analysts have identified a $35 downside target if current support breaks.

The bull thesis hinges on Hill's turnaround gaining momentum in North America wholesale over the next two quarters. The thesis weakens materially if Greater China revenue declines accelerate past 15%. Investors will watch the next quarterly report for signs that wholesale rebalancing is translating into sustained margin recovery.

This article is for informational purposes only and does not constitute investment advice.