Shares of Nike (NKE) surged 14% in early morning trading following a fourth-quarter earnings report that beat expectations and sparked a wave of analyst upgrades. Despite weaker revenue, the better-than-expected profits and signs of progress in Nike’s turnaround strategy have boosted investor confidence.
Nike reported earnings of 14 cents per share for the quarter, surpassing analyst estimates of 11 cents, according to FactSet. Revenue fell 12% year-over-year to $11.1 billion but still topped expectations of $10.73 billion. The mixed results revealed challenges across regions and sales channels, but several Wall Street analysts saw enough in the report to take a more bullish stance.
North American revenue dropped 11%, while sales in Greater China plummeted 21%, reflecting continued headwinds in key international markets. Nike Direct revenue was down 14%, with wholesale revenue slipping 9%. Digital sales—a key focus area for Nike in recent years—declined sharply by 26%. However, a modest 2% increase in brick-and-mortar store sales helped cushion the blow.
Product-wise, footwear sales declined 13%, and apparel revenue dropped 10%, underlining broad-based softness in consumer demand. CEO Elliott Hill acknowledged the disappointing numbers but emphasized that the company is on track with its internal expectations. “These results are not where we want them to be,” Hill said, “but we are confident in our path forward as we execute our turnaround plan.”
CFO Matthew Friend noted that Q4 reflected the peak impact of Nike’s strategic changes, adding that many of the current headwinds should begin to ease in the coming quarters.
The earnings beat and cautious optimism from Nike leadership prompted several analysts to revise their outlooks. JPMorgan raised its price target to $64 from $56, maintaining a neutral rating but citing signs of an improving demand trend. According to the firm, Nike’s guidance signals a 100-basis-point improvement in underlying demand from the previous quarter.
Bank of America was more upbeat, saying the “worst is behind” Nike and projecting a return to revenue growth by the second half of 2026. While the firm lowered its 2026 earnings forecast slightly—from $1.80 to $1.60 per share—due to margin pressure from tariffs, it raised its price target by $4 to $84 and reiterated a buy rating. BofA expressed growing confidence in Nike’s innovation pipeline and upcoming product launches, which it believes could serve as catalysts for a turnaround.
HSBC also joined the bullish camp, upgrading Nike to “buy” from “hold” and increasing its price target to $80 from $60. The firm cited “tangible evidence” that Nike is heading toward a sales rebound and expects margin recovery once the company completes its ongoing inventory cleanup. HSBC wrote that Nike’s refreshed product lineup should soon be “current and exciting,” helping to re-engage consumers.
While the road to recovery is still uncertain, the sharp rebound in Nike’s stock and a shift in analyst sentiment suggest that investors are starting to buy into the company’s turnaround narrative. With an improved outlook for innovation, inventory management, and sales growth, Nike may be stepping back onto a path toward sustainable performance.
