Nike Inc. (NYSE:NKE) rose about 2% on Wednesday after Barclays upgraded the sportswear giant to Overweight from Equalweight and lifted its price target to $73 from $64.
Barclays analyst Adrienne Yih said the upgrade reflects recent operational improvements, financial turning points and management’s disciplined execution. “While acknowledging ongoing risks, we believe the risk/reward profile has shifted favorably, making NKE an attractive investment opportunity at this stage,” Yih commented.
The analyst pointed to progress in inventory management, operational restructuring and a renewed focus on strengthening the brand and stabilizing margins. Yih added that the upgrade reflects what Barclays believes is a peak in investor skepticism, even as the company’s turnaround in North America appears to be progressing largely according to plan.
Barclays also highlighted concrete signs of operational improvement in the North American market, including a return to double-digit growth in the running category and sales expanding at a faster pace than inventory levels. According to the firm, investor concerns about the company’s recovery do not fully account for these improvements and instead place too much emphasis on the ongoing reset challenges in China and certain regions of Asia-Pacific and Latin America.
The analyst also pushed back on what Barclays described as a misleading narrative that Nike had been “stuffing” wholesale distribution channels, saying the activity instead reflects a standard restocking cycle.
Barclays acknowledged that risks remain, particularly from tariffs, geopolitical tensions and uncertain consumer demand. Still, the firm said Nike’s recent actions and early financial improvements suggest the company may have passed the most difficult phase of its turnaround.
For long-term investors, Barclays said Nike now offers an appealing risk-reward opportunity as it approaches what the firm views as a fundamental bottom and prepares for a potential return to growth.