Nike Named Top Sector Pick for 2026 by Jefferies Amid Turnaround Strategy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 22 2025
0mins
Should l Buy NKE?
Source: CNBC
- Nike Sector Selection: Jefferies has named Nike a top sector pick for 2026, with analysts expressing confidence in management's turnaround strategy, indicating that sales have bottomed out and showcasing the brand's broad appeal.
- Inventory Management Advantage: Jefferies highlights that next year's sector winners will be those with robust inventory management and flexible supply chains, as Nike works to eliminate excess inventory and address tariff issues, thereby supporting margin recovery and reducing discount risks.
- Earnings Forecast Adjustment: Despite Nike's earnings beat last week, analysts have lowered the price target to $75 due to weakness in the Chinese market and disappointing guidance, reflecting a cautious outlook on future performance.
- Market Trend Confidence: While challenges persist in the Chinese market, Jim Cramer remains optimistic about Nike's potential growth, noting that North America is on track for sustainable profit growth, encouraging investors to buy during the stock's decline.
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Analyst Views on NKE
Wall Street analysts forecast NKE stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NKE is 76.11 USD with a low forecast of 62.00 USD and a high forecast of 110.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
14 Buy
7 Hold
0 Sell
Moderate Buy
Current: 62.410
Low
62.00
Averages
76.11
High
110.00
Current: 62.410
Low
62.00
Averages
76.11
High
110.00
About NKE
NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company's operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. The Company also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Advertising Impact: In the Nike advertisement aired post-victory, former player Marshawn Lynch emphasized the theme of “Bitter Tastes Good,” highlighting the value of hard work, which attracted consumer attention and reinforced Nike's brand image, showcasing its powerful influence in sports advertising.
- Nike's Market Reaction: Nike's shares surged in overnight trading following the Super Bowl ad, reflecting market optimism regarding the brand's revival, despite a nearly 10% decline in stock price over the past year, investors are hopeful about new CEO Elliott Hill's strategic repositioning efforts.
- Retail Sentiment Analysis: Although Nike's follower count on social platforms increased by 8%, retail sentiment remains in the 'bearish' territory, indicating cautious market outlook on Nike's future performance, which could impact its short-term stock price.
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- Restructuring Agreement: The company has entered into a Restructuring Support Agreement with its secured lenders and commenced voluntary bankruptcy proceedings in the U.S. Bankruptcy Court for the District of New Jersey, aiming to maintain operations and seek a buyer through restructuring.
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- Layoff Expectations Rise: Converse CEO Aaron Cain indicated in an internal memo that the company would face layoffs due to continued revenue declines, although the exact number of job cuts remains unclear, highlighting the urgency of the brand's turnaround efforts.
- Nike Stock Volatility: Nike's stock fell 2.4% on Monday, though it is uncertain if this was related to the Converse news; analysts suggest that layoffs could lower costs and boost profits, leading to mixed investor reactions.
- Brand Future Uncertainty: Converse currently accounts for only 2.5% of Nike's revenue, and management has not clarified whether the brand will be sold, despite Nike's history of divesting other brands; analysts remain cautious about Converse's future, emphasizing that revitalizing the brand is crucial for stock price improvement.
See More
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- Sales Decline: Converse reported a 30% drop in sales during Nike's most recent quarter, falling to $300 million, with declines across all regions, indicating a prolonged negative growth trend that has compelled management to consider layoffs to cut costs and revitalize the brand.
- Layoff Plans: CEO Aaron Cain mentioned in an internal memo that difficult decisions had to be made, including saying goodbye to employees, although the exact number of job cuts remains unclear; this move reflects the severe challenges the brand is facing.
- Brand Restructuring: Since Elliott Hill took over as CEO, Nike has been working to rebuild relationships with key retail partners and refocus on sports, yet Converse's performance has become a pain point in this transformation process, potentially impacting Nike's overall profitability.
- Uncertain Future: Although Converse accounts for only 2.5% of Nike's revenue, analysts speculate about the possibility of its sale, given Nike's history of divesting other brands; management has not addressed this issue, highlighting the complexities of the brand's restructuring efforts.
See More
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- Remote Work Directive: Employees at Converse have been instructed to work from home ahead of an upcoming all-team meeting, a measure that not only reflects internal uncertainty but may also affect team morale and productivity.
- Brand History and Market Position: Founded in 1908, Converse once held over 60% market share in the basketball shoe market during the 1950s and 1960s with its All Star sneaker, but has recently faced challenges due to limited product innovation and increasing competition, impacting its market performance.
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See More
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- Significant Revenue Decline: Converse reported a 30% year-on-year revenue drop in Q2 2026, totaling $300 million, reflecting weak sales across all territories and highlighting the brand's competitive pressures that necessitate strategic adjustments to regain growth.
- Layoffs and Team Restructuring: The company is implementing layoffs while also planning to add new roles and reshuffle some staff teams, as CEO Aaron Cain mentioned in an internal memo about these “difficult decisions,” aimed at enhancing team efficiency and market responsiveness.
- Executive Departures: The strategic changes have led to the departure of several senior executives at Converse, which could impact the company's leadership and decision-making processes, further exacerbating uncertainties in the brand's market position.
- Remote Work Arrangement: During this strategic transition, Converse has asked employees to work from home this week, a move intended to minimize operational disruptions while preparing for an upcoming all-team meeting to communicate the company's future direction.
See More
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- Super Bowl Victory: The Seattle Seahawks clinched the Super Bowl Championship by defeating the New England Patriots 29-13, marking a triumphant return after their previous loss in Super Bowl 49, which boosts team morale and enhances brand visibility.
- Advertising Impact: In the Nike advertisement aired post-victory, former player Marshawn Lynch emphasized the theme of “Bitter Tastes Good,” highlighting the value of hard work, which attracted consumer attention and reinforced Nike's brand image, showcasing its powerful influence in sports advertising.
- Nike's Market Reaction: Nike's shares surged in overnight trading following the Super Bowl ad, reflecting market optimism regarding the brand's revival, despite a nearly 10% decline in stock price over the past year, investors are hopeful about new CEO Elliott Hill's strategic repositioning efforts.
- Retail Sentiment Analysis: Although Nike's follower count on social platforms increased by 8%, retail sentiment remains in the 'bearish' territory, indicating cautious market outlook on Nike's future performance, which could impact its short-term stock price.
See More
Eddie Bauer Files for Voluntary Chapter 11 Bankruptcy Protection Amid Operational Pressures
- Bankruptcy Filing: Eddie Bauer LLC announced on Monday that it has filed for voluntary Chapter 11 bankruptcy protection, primarily due to tariff uncertainty and mounting operational pressures, highlighting the severe financial challenges the company faces.
- Restructuring Agreement: The company has entered into a Restructuring Support Agreement with its secured lenders and commenced voluntary bankruptcy proceedings in the U.S. Bankruptcy Court for the District of New Jersey, aiming to maintain operations and seek a buyer through restructuring.
- Retail Operations Continuity: Despite entering bankruptcy, Eddie Bauer's stores in the U.S. and Canada will remain open for liquidation sales, maximizing asset value while searching for a going-concern buyer, indicating a strategic approach to asset management during financial distress.
- E-commerce Business Stability: Eddie Bauer's e-commerce and wholesale operations, which transitioned to Outdoor 5, LLC in January, remain unaffected by the bankruptcy process, suggesting that the company has managed to stabilize part of its business during this transition.
See More
Nike's Turnaround Faces Challenges as Converse Revenue Declines
- Converse Revenue Decline: Nike reported a 30% drop in Converse revenue to $300 million in the latest quarter, with declines across all regions, indicating ongoing performance issues that negatively impact Nike's overall market standing.
- Layoff Expectations Rise: Converse CEO Aaron Cain indicated in an internal memo that the company would face layoffs due to continued revenue declines, although the exact number of job cuts remains unclear, highlighting the urgency of the brand's turnaround efforts.
- Nike Stock Volatility: Nike's stock fell 2.4% on Monday, though it is uncertain if this was related to the Converse news; analysts suggest that layoffs could lower costs and boost profits, leading to mixed investor reactions.
- Brand Future Uncertainty: Converse currently accounts for only 2.5% of Nike's revenue, and management has not clarified whether the brand will be sold, despite Nike's history of divesting other brands; analysts remain cautious about Converse's future, emphasizing that revitalizing the brand is crucial for stock price improvement.
See More
Converse Faces Significant Job Cuts Amid Sales Decline
- Sales Decline: Converse reported a 30% drop in sales during Nike's most recent quarter, falling to $300 million, with declines across all regions, indicating a prolonged negative growth trend that has compelled management to consider layoffs to cut costs and revitalize the brand.
- Layoff Plans: CEO Aaron Cain mentioned in an internal memo that difficult decisions had to be made, including saying goodbye to employees, although the exact number of job cuts remains unclear; this move reflects the severe challenges the brand is facing.
- Brand Restructuring: Since Elliott Hill took over as CEO, Nike has been working to rebuild relationships with key retail partners and refocus on sports, yet Converse's performance has become a pain point in this transformation process, potentially impacting Nike's overall profitability.
- Uncertain Future: Although Converse accounts for only 2.5% of Nike's revenue, analysts speculate about the possibility of its sale, given Nike's history of divesting other brands; management has not addressed this issue, highlighting the complexities of the brand's restructuring efforts.
See More
Converse to Implement Major Layoffs Amid Challenges
- Executive Layoff Warning: Converse CEO Aaron Cain warned employees in an internal memo that the brand would face tough decisions, including saying goodbye to multiple senior executives, which will directly impact the company's leadership structure and decision-making efficiency.
- Remote Work Directive: Employees at Converse have been instructed to work from home ahead of an upcoming all-team meeting, a measure that not only reflects internal uncertainty but may also affect team morale and productivity.
- Brand History and Market Position: Founded in 1908, Converse once held over 60% market share in the basketball shoe market during the 1950s and 1960s with its All Star sneaker, but has recently faced challenges due to limited product innovation and increasing competition, impacting its market performance.
- Nike's Strategic Shift: Since being acquired by Nike in 2003, Converse has become a global brand; however, it now faces significant challenges within Nike's portfolio, particularly due to a lack of innovation beyond the core Chuck Taylor line, which could lead to a decline in brand value.
See More
Converse Layoffs Amid Strategic Restructuring
- Significant Revenue Decline: Converse reported a 30% year-on-year revenue drop in Q2 2026, totaling $300 million, reflecting weak sales across all territories and highlighting the brand's competitive pressures that necessitate strategic adjustments to regain growth.
- Layoffs and Team Restructuring: The company is implementing layoffs while also planning to add new roles and reshuffle some staff teams, as CEO Aaron Cain mentioned in an internal memo about these “difficult decisions,” aimed at enhancing team efficiency and market responsiveness.
- Executive Departures: The strategic changes have led to the departure of several senior executives at Converse, which could impact the company's leadership and decision-making processes, further exacerbating uncertainties in the brand's market position.
- Remote Work Arrangement: During this strategic transition, Converse has asked employees to work from home this week, a move intended to minimize operational disruptions while preparing for an upcoming all-team meeting to communicate the company's future direction.
See More
