Wells Fargo sees a better setup for Nike going forward. The bank upgraded the sportswear stock to overweight from equal weight. Analyst Ike Boruchow also lifted his price target to $75 from $60, implying a gain of 17% from Wednesday’s close. Boruchow pointed to improve visibility in Nike’s profits and losses, where numbers appear to be bottoming. He raised his earnings forecast for the fiscal years 2026 and 2027. NKE YTD mountain NKE YTD chart “NKE has been in a negative revision cycle for 3+ years, and we see that reversing over the next 6-9 months,” he wrote. “We can finally begin to map out realistic ‘return to growth’ forecasts, while sizable margin levers likewise take hold. Said differently, NKE has the potential to exit FY26 growing revs +3-4% with [gross margins] expanding +200bps.” The analyst added that existing headwinds to Nike’s business are set to dissipate. While Boruchow expects revenues for Nike’s classics to decline $11.5 billion this fiscal year, he believes this number will slide to $9 billion in fiscal year 2026. “From here, 3 things inform our view that moderation is set to play-out go-fwd: 1) industry checks confirm this view, 2) NKE commented they’re seeing stabilization in AF1/AJ1, 3) historical sneaker search data tells us large franchise downtrends can last 40-70 months (with AF1/AJ1 currently at 63/54 months),” he added. Meanwhile, Nike’s non-classics footwear should be leading the company’s growth, Boruchow said. “Our math suggests that both footwear (ex Classics) and NKE’s ‘rest of biz’ accelerated meaningfully in 1Q,” he wrote. “While wholesale sell-in surely accounts for a chunk of this growth, it’s also clear that NKE’s revamped silhouettes (Vomero and Peg) are driving greater volumes and should lend credibility to the turnaround efforts.” Shares of Nike have tumbled 15% this year.
