Goldman Sachs analyst Brooke Roach has reaffirmed her Buy rating on Nike, Inc. (NKE), setting a price target of $105. While the analyst anticipates a strong first-quarter performance, slated for release on October 1st, there are lingering uncertainties surrounding Nike’s growth path.
Investors are closely watching trends in China versus North America. The Chinese market, known for its volatility, has shown mixed signals, raising questions about the brand’s ability to regain momentum. Concerns also center around the effectiveness of Nike’s franchise management strategies, particularly the extent and duration of rebalancing within the lifestyle category.
Roach highlights the need for a clear focus on innovation and scaling initiatives, especially in the Chinese market. She expects increased emphasis on forward-looking insights concerning the second quarter and second half of the fiscal year, particularly regarding the performance of the innovation pipeline.
Investors are looking for clarity on Nike’s plans for an upcoming investor day, where the new CEO is expected to unveil his initial priorities. China’s economic landscape and its impact on Nike’s performance remain key areas of concern, given weak demand in the region during the summer.
The analyst predicts a revenue decline of 10.5% and earnings per share (EPS) of $0.51 for the upcoming quarter. For the full fiscal year 2025, she projects a revenue decrease of 5.0% year-over-year, with a slight gross margin expansion of 31 basis points and an EPS of $3.24.
As of Wednesday, NKE shares were trading at $87.94, up 0.55% on the day.
In light of these uncertainties, investors will be closely monitoring Nike’s upcoming earnings release and the company’s strategic direction in the coming months.
