The CEO of Nike Inc. NKE, Elliott Hill, has earned the confidence of Jeffries analyst Randal Konik, who is optimistic about Hill’s strategic plans for the company.
What Happened: Konik, in his analyst note to clients, shared that Hill’s strategy to rejuvenate wholesale partnerships and launch new products will substantially enhance Nike’s profitability and market share in the athletic footwear industry in the foreseeable future, reported Market Watch. As a result, Konik upgraded his rating on Nike’s stock from ‘Hold’ to ‘Buy’, dubbing it his “new top pick.”
Konik also raised his stock price target for Nike to $115 from $75, suggesting a potential 43.2% upside from the closing price of $80.28 on Monday. He opines that the current valuation of Nike’s stock, regarding sales expectations for the upcoming year, is at its lowest in ten years, creating a “valuation floor.”
“With shares near a valuation trough, we believe now is the right time to aggressively buy shares,” wrote Konik in the note.
Despite past missteps, including a reduced focus on product innovation and an excessive emphasis on Nike Digital and direct sales, Konik remains confident that Hill’s expertise and strategy will resolve these challenges. He also pointed out a notable rise in job postings for product roles, indicating a renewed focus on product innovation.
Konik anticipates a V-shaped recovery in margins by 2027, pushing earnings above current Wall Street expectations. A Jefferies survey found that more than half of U.S. consumers planning to purchase athletic footwear prefer Nike, reinforcing Konik’s optimistic outlook.
Why It Matters: Nike’s strategic moves under Hill’s leadership have already begun to bear fruit. The company recently announced the launch of NikeSKIMS, a new brand developed in collaboration with SKIMS, an American shapewear and clothing brand co-founded by Kim Kardashian.
Nike also returned to the Super Bowl advertisement arena after 27 long years. The brand hogged the limelight with its commercial putting a female athlete on centerstage. This ad aired at a time for Nike when it strives to revitalize its business following three consecutive quarters of declining revenue. In the quarter ending November, net revenue dropped 7.7% to $12.35 billion. The stock has plunged more than 23% over the last year.
The brand has been suffering since the COVID-19 pandemic after it spoiled relations with wholesalers in a bid to push direct-to-customer sales. However, investor confidence seems to have returned after the veteran CEO presented a turnaround plan in December.
Notably, Bill Ackman‘s Pershing Square Holdings converted their Nike equity position into deep-in-the-money call options in early 2025 sensing a potential upside to the stock. In their investor presentation, Pershing Square stated, “Hill is the ideal person to return Nike to dominance and growth.”
Nike stock jumped 4.9% yesterday following the bullish note by the Jeffries analyst.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
