Nike (NYSE:NKE) Holds "Market Perform" Rating Amidst Anticipated Revenue and Earnings Decline

• Telsey Advisory reaffirms "Market Perform" rating for Nike (NYSE:NKE), indicating a hold position despite anticipated declines in revenue and earnings.
• Nike faces a significant 15% drop in revenues and an 89% decline in earnings per share (EPS) for the fourth quarter, largely due to macroeconomic pressures and changing consumer preferences.
• Despite challenges, Nike focuses on long-term strategies such as innovation and digital transformation, with a free cash flow yield of 7% providing some financial stability.

On June 23, 2025, Telsey Advisory reaffirmed its "Market Perform" rating for Nike (NYSE:NKE), suggesting investors hold the stock. At the time, Nike's stock was priced at $60.82. This rating comes as Nike faces a challenging fourth quarter, with anticipated revenue and earnings declines due to macroeconomic pressures and changing consumer preferences.

Nike is bracing for a 15% drop in revenues and an 89% decline in earnings per share (EPS) for the fourth quarter. The Zacks Consensus Estimate projects revenues at $10.7 billion, a 15.4% decrease from the previous year. Analysts expect EPS to fall to 11 cents, marking an 89.1% drop. These figures highlight the significant hurdles Nike faces, including weakness in the Chinese market and digital sales softness.

Despite these challenges, Nike is focusing on long-term strategies like innovation and digital transformation. The company aims to reshape its recovery trajectory, even as it deals with high costs and a shrinking gross margin. Nike's free cash flow yield of 7% is a crucial factor in its financial health, providing some stability amid the current difficulties.

Historically, Nike's stock has struggled post-earnings, closing lower in seven of its last eight sessions. However, since reaching a low of $52.28 in April, the stock has been on an upward trend, recently establishing support at $60. The current stock price is $61.17, reflecting a 2.30% increase, with a trading volume of 9,503,875 shares on the NYSE.

As Nike prepares to release its fiscal Q4 2025 earnings on June 26, analysts are closely watching for guidance on Q1 2026 and the fiscal year 2026 outlook. The company's inventory liquidation by May 2025 may lead to minor financial improvements. Investors are keen to see how Nike navigates these challenges and leverages its strategies for future growth.