NIKE (NKE) Stock Forecast & Price Target

Nike has demonstrated a robust financial outlook driven by a stronger-than-expected gross margin increase of 120 basis points year-over-year in Q1, significantly surpassing initial guidance. The company's direct-to-consumer (DTC) strategy and market share gains, particularly in the fast-growing global activewear sector, are noteworthy, with heightened demand reflected in rising Google searches for their product styles. Additionally, anticipated product innovations and improved sales trends within certain franchises suggest potential for positive growth in sales, margins, and earnings per share in the latter half of fiscal 2026.

Nike is facing a challenging financial outlook, with forecasts indicating a deterioration of constant-FX revenue trends to a low double-digit decline and a guided gross margin contraction of 300-350 basis points as the company works through excess inventory. In a bear case scenario, the revenue trends could worsen further, potentially leading to earnings per share (EPS) of approximately $1.75, accentuated by projected declines in both revenue and gross margins. Additionally, the company is experiencing significant margin deleverage, with gross margin and EBIT margin anticipated to drop by 400 basis points, highlighting ongoing operational challenges amid subdued sales performance.